ACI 3I0-012 Online Practice Questions and Exam Preparation

ACI 3I0-012 Online Questions & Answers

• Question 501:

  If a 6-month AUD/NZD swap is quoted 173/165, which of the following statements would you consider to be correct?

  A. 6-month AUD rates are higher than 6-month NZD rates
  B. 6-month AUD rates are lower than 6-month NZD rates
  C. Spot AUD/NZD will be higher by approximately 170 points in 6 months
  D. The AUD yield curve is positive, whilst the NZD curve is negative
  A. 6-month AUD rates are higher than 6-month NZD rates

• Question 502:

  The vega of an option is:

  A. The sensitivity of the option value to changes in interest rates
  B. The sensitivity of the option value to changes in implied volatility
  C. The sensitivity of the option value to changes in the time to expiry
  D. The sensitivity of the option value to changes in the price of the underlying
  B. The sensitivity of the option value to changes in implied volatility

• Question 503:

  A forward/forward FX swap:

  A. is a contract by which the maturity of a regular FX swap can be extended at an historic (noncurrent) rate
  B. is a swap transaction where the near leg is traded either value today or value tomorrow and the far leg is traded spot
  C. is a swap that does not start spot and where both the near and the far leg are traded forward
  D. is a transaction by which a maturing outright forward FX is prolonged at an historic (non-current) rate
  C. is a swap that does not start spot and where both the near and the far leg are traded forward

• Question 504:

  A fixed rate forward/forward non-deliverable deposit/loan transaction, settled in cash with an agreed upon process for calculating the market reference at the commencement of the forward/forward period, is called:

  A. an interest rate swap
  B. a forward rate agreement
  C. a short term interest rate future
  D. an interest rate collar
  B. a forward rate agreement

• Question 505:

  The seller of a floor:

  A. Receives compensation if a reference interest rate falls below an agreed level
  B. Pays compensation if a reference interest rate falls below an agreed level
  C. Receives compensation if a reference interest rate rises above an agreed level
  D. Pays compensation if a reference interest rate rises above an agreed level
  B. Pays compensation if a reference interest rate falls below an agreed level

• Question 506:

  You quote the following rates to a customer spot GBP/CHF 2.2005-10 3M GBP/CHF swap 120/115 At what rate do you sell GBP to a customer 3-month outright?

  A. 2.1890
  B. 2.2125
  C. 2.1895
  D. 2.1885
  C. 2.1895

• Question 507:

  Lending for 3 months and borrowing for 6 months creates a 3x6 forward-forward deposit. The cost of that deposit is called:

  A. Implicit nominal rate
  B. Implied forward rate
  C. Funding rate
  D. Effective future rate
  B. Implied forward rate

• Question 508:

  Which of the following statements best describes the conditions under which a prime broker may accept a trade given up?

  A. the trade is within the specified tenor limits
  B. the trade is within the tenor limits and is of an applicable trade type
  C. the trade is within the tenor limits and credit limits
  D. the trade is within the tenor limits, credit limits and is of an applicable trade type
  D. the trade is within the tenor limits, credit limits and is of an applicable trade type

• Question 509:

  What is settlement risk in FX?

  A. The risk of failure of a payments or settlement system
  B. The risk that only one side of an exchange of currencies will be made
  C. The risk of payments `gridlock' in a real-time gross settlement system
  D. The risk that default by a counterparty before the value date means you have to replace the defaulted deal at a worse rate
  B. The risk that only one side of an exchange of currencies will be made

• Question 510:

  A bank quotes a spot rate that is verifiably incorrect and deviates substantially from the prevailing market rate.

  A. you should hit the price and hold the bank to the quoted incorrect rate, as the quoted party is entitled to hold the quoting party to an erroneous rate
  B. you should ask the dealer to check his price, as it is highly unethical for one party to hold another to an erroneously agreed rate
  C. you should point out the mistake and split the difference
  D. you should keep on dealing with this bank until the mistake is rectified
  B. you should ask the dealer to check his price, as it is highly unethical for one party to hold another to an erroneously agreed rate