ACI 3I0-012 Online Practice Questions and Exam Preparation

ACI 3I0-012 Online Questions & Answers

• Question 481:

  If the duration gap is zero, how will a small parallel shift in interest rates affect the market value of the bank's equity?

  A. If interest rates rise, the market value of equity will increase.
  B. If interest rates rise, the market value of equity will decrease.
  C. The bank is immunised from changes in interest rates.
  D. The market value of equity will decrease due to an increase in interest rates.
  C. The bank is immunised from changes in interest rates.

• Question 482:

  What does the Model Code recommend with regard to any give-up agreement between a prime broker and an executing dealer?

  A. That the Master FX Give-Up Agreement (FMLG - New York FED FXC) published by the Foreign Exchange Committee can be used for this purpose.
  B. That this agreement need not specify the permitted transaction types, tenors or credit limits.
  C. That this agreement must include instructions that the prime broker must advise the executing dealer promptly of trades for give-up.
  D. That this agreement should not involve any requirement for the executing dealer to inform the prime broker of the material terms of the transaction once a trade has been executed.
  A. That the Master FX Give-Up Agreement (FMLG - New York FED FXC) published by the Foreign Exchange Committee can be used for this purpose.

• Question 483:

  The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

  A. Exchange-traded
  B. Guaranteed
  C. Standardised
  D. All of the above
  D. All of the above

• Question 484:

  A 7% CD was issued at par, which you now purchase at 6.75%. You would expect to pay:

  A. The face value of the CD
  B. More than the face value
  C. Less than the face value
  D. Too little information to decide
  B. More than the face value

• Question 485:

  All prices quoted by brokers should be taken to be:

  A. under reference
  B. firm, but not necessarily in marketable amounts
  C. firm, unless otherwise qualified
  D. merely indicative
  C. firm, unless otherwise qualified

• Question 486:

  When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

  A. front running
  B. ex ante trading
  C. insider dealing
  D. forward-facing
  A. front running

• Question 487:

  Which of the following does the Model Code not recommend to prevent technical errors by etrading devices?

  A. A manual "kill button" to disable the system's ability to trade and cancel all resting orders.
  B. An `inbound message rate" feature that monitors the number of confirmation messages that are sent from trading venues within a specific time period.
  C. A "repeated automated execution throttle" monitoring the frequency of strategies that are filled and then re-entered into the market without human intervention through automated trading systems.
  D. A "fat-finger quantity" feature limiting the size of orders that can be sent from the trading systems and preventing order quantities above the fat-finger limit from leaving the system.
  B. An `inbound message rate" feature that monitors the number of confirmation messages that are sent from trading venues within a specific time period.

• Question 488:

  Which one of the following statements about mark-to-model valuation is correct?

  A. Mark-to-model valuation is used for exchange-traded positions to ensure correct pricing.
  B. Asset managers are not allowed to use mark-to-model valuation.
  C. Mark-to-model valuation is used for complex financial instruments; it is always accurate and in line with potential tradable prices.
  D. Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.
  D. Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.

• Question 489:

  Management policy on the use of mobile devices by trading sales and settlement staff should:

  A. Ban them from the dealing room or back office.
  B. State whether they are allowed in the dealing room and back office, and can be used.
  C. Ban their use in the dealing room or back office.
  D. Restrict their use to senior management and authorised out-of-hours trading and sales staff.
  B. State whether they are allowed in the dealing room and back office, and can be used.

• Question 490:

  A 7-day piece of USCP is quoted at a rate of discount of 1.75%. What is its true yield?

  A. 1.73%
  B. 1.75%
  C. 1.77%
  D. 1.80%
  B. 1.75%