ACI 3I0-012 Online Practice Questions and Exam Preparation

ACI 3I0-012 Online Questions & Answers

• Question 581:

  Which one of the following statements regarding the variance-covariance method for calculating value- at- risk is true?

  A. The volatilities of the underlying assets are normally distributed and the prices remain constant.
  B. The risk factors are normally distributed and volatilities of risk factors and correlations between risk factors are constant.
  C. The prices of underlying assets are normally distributed, the volatilities of risk factors follow a GARCH process and correlations between risk factors are constant.
  D. The returns of underlying assets are normally distributed and volatilities of risk factors and correlations between risk factors are constant.
  D. The returns of underlying assets are normally distributed and volatilities of risk factors and correlations between risk factors are constant.

• Question 582:

  Using the following rates:

  3M (90-day) eurodeposits3.50%

  6M (180-day) eurodeposits3.75%

  What is the rate for a deposit, which runs from 3 to 6 months?

  A. 3.625%
  B. 3.285%
  C. 3.965%
  D. 3.835%
  C. 3.965%

• Question 583:

  What are the primary reasons for taking an initial margin in a classic repo?

  A. Counterparty risk and operational risk
  B. Counterparty risk and legal risk
  C. Collateral illiquidity and counterparty risk
  D. Collateral illiquidity and legal risk
  C. Collateral illiquidity and counterparty risk

• Question 584:

  Experience has shown that recourse to taped telephone conversations proves invaluable to the speedy resolution of disputes. Therefore, the Model Code recommends:

  A. that all telephone conversations (internal and external) be taped without informing counterparties
  B. that only conversations undertaken by dealers and brokers should be recorded
  C. that all conversations undertaken by dealers and brokers should be recorded, together with back office telephone lines used by those responsible for confirming deals or passing payments to other institutions
  D. that only telephone conversations between dealers and brokers be recorded
  D. that only telephone conversations between dealers and brokers be recorded

• Question 585:

  A 3-month (90-day) NZD deposit is 2.75% and 6-month (180-day) NZD deposit is 3.00%. What is the 3x6 NZD deposit rate?

  A. 3.2281%
  B. 3.2278%
  C. 3.00%
  D. 2.875%
  B. 3.2278%

• Question 586:

  What is the effect of netting?

  A. To reduce the number and size of payments and transfers
  B. To reduce exposure to credit risk
  C. To reduce the size of the balance sheet
  D. All of the above
  D. All of the above

• Question 587:

  What is the ISO code for the currency of China?

  A. CHY
  B. CNR
  C. CHR
  D. CNY
  D. CNY

• Question 588:

  You have a USD loan that is priced at 3-month LIBOR+50. LIBOR for the loan will be re-fixed in exactly one month. The market is quoting:

  1x3 USD FRA. 1.95-98% 1x4 USD FRA. 2.07-10% 1x6 USD FRA 2.25-28%

  To hedge the next LIBOR fixing, you should:

  A. Sell a 1x3 FRA at 1.95%
  B. Buy a 1x3 FRA at 1.98%
  C. Buy a 1x4 FRA at 2.10%
  D. Sell a 1x4 FRA at 2.10%
  C. Buy a 1x4 FRA at 2.10%

• Question 589:

  What is the incentive for market-making?

  A. Bid/offer spread
  B. Flow information
  C. Relationships
  D. All of the above
  D. All of the above

• Question 590:

  Under Basel rules, what is the meaning of RWA?

  A. Risk Weighted Assets
  B. Risk Weighted Average
  C. Recovery Weighted Assets
  D. Risk Weighted Adjustments
  A. Risk Weighted Assets