3I0-012 Exam Dumps - ACI Dealing Certificate

has the option to fulfill the outright forward or not at maturity

may freely choose the maturity, given a 24-hour notice to the bank

can choose any maturity within a previously fixed period

may decide to deal at the regular maturity or on either the business day before or after

Profit of JPY 340.000

Profit of JPY 1.500,000

Loss of JPY 340.000

LossofJPV 500.000

1.299971

1.309966

1.309971

1.310029

Off-premises dealing should be strictly prohibited.

After-hours trading should be prohibited.

Deals transacted after normal business hours or off-premises should only be undertaken on mobile phones approved by management.

Deals transacted after normal business hours or off-premises either by mobile phones or any other equipment should only be undertaken with the approval of management.

...only at the discretion of the head of treasury.

...only at the discretion of the head of trading.

...as long a counterparty and issuer limit is in place.

... is not permitted.

1.3042-1.30435

1.30405-1.3045

1.30095-1.3011

1.4575- 1.4728

Bought EUR and sold USD spot, and sold FUR and bought USD forward

Bought EUR/USD spot and sold EUR/USD forward

Taken a EUR loan in exchange for making a USD loan with the same counterparly

All of the above

The best strategy to treat and mitigate risk is avoiding the risk by avoiding the business

The best strategy to treat and mitigate risk is transferring the risk to another party, e. g. by transfer to an insurance company

The best strategy to treat and mitigate risk is to establish the appropriate processes for identifying, assessing, managing, monitoring and reporting risks

The best strategy to treat and mitigate risk is to reduce the negative effect of the risk, e. g. by hedging

Selling a Money Market Future and/or selling a Forward Rate Agreement

Buying a Money Market Future and/or buying a Forward Rate Agreement

Selling a Money Market Future and/or buying a Forward Rate Agreement

Buying a Money Market Future and/or selling a Forward Rate Agreement

A short put option + long call option at the same strike price

A long put option + short call option at the same strike price

A short put option + short call option at the same strike price

A long put option + long call option at the same strike price

The name of Banks A and B.

The name of Bank B only.

The amount that was bid but not the name of Bank A.

None of the above

detail the rights of counterparties regarding the substitution of collateral

include named securities permitted to be traded

be bi-laterally signed by both dealers involved in any transaction

need not be in place before any deals are executed or finalized

greater, the higher the coupon and the longer the term

greater, the lower the coupon and the longer the term

lower, the lower the coupon and the shorter the term

lower, the higher the coupon and the longer the term

(i), (ii), (iii), & (iv).

(i), (ii) & (iii).

(i) & (iii).

none of the above.

Exchange-traded

Guaranteed

Standardised

All of the above

A forward-forward rate of 0.685%

A forward-forward rate of 0.315%

Current 3-month LIBOR of 0.6850%

Current 3-month LIBOR of 0.3150%

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

Sell

Sell and subsequently buy back

Sell and borrow

Sell, borrow and buy back simultaneously

A nostro account is an account held by a bank in a foreign country in the banks domestic currency.

A nostro account is an account held by a bank in a foreign country for cash collateralising OTC derivative positions with banks in that country.

A nostro account is an account held by a bank in a foreign country in the currency of that country.

A nostro account is an account held by a bank in its home country in a foreign currency.

7.09%

7.03%

6.90%

6.95%

EUR rates are higher than AUD rates in the 6-month

AUD rates are higher than EUR rates in the 6-month

There is a positive EUR yield curie

There is not enough information to decide

entering into a pay fixed I receive variable standard interest rate swap

entering into a receive fixed I pay variable standard interest rate swap

entering into a pay fixed / receive variable amortizing interest rate swap

entering into a GBP/USD FX swap

the practice of a dealer attempting to replace one customer by a new one in a previously dealt transaction

the practice of a broker having to show a new name to the dealer, although he was full on the first name presented to him

the practice of a broker attempting to substitute a third name between the two original counterparties to clear the transaction

the practice of a broker attempting to show a substitution name to get out of a situation in which he was stuffed by a dealer

Delivery repo

HIC repo

To-party repo

“Double dipping” is never a risk in any type of repo

A contract to exchange one stream of interest payments for another

A temporary exchange of one deposit for another of a longer maturity in the same currency

A forward-forward contract

A contract to exchange an interest rate stream in one currency for another one in a different currency

Pay 250.00, receive 1,250.00, receive 1,750.00, receive 2,000.00

Receive 250.00, pay 1,250.00, pay 1,750.00, pay 2,000.00

Pay 2,500.00, receive 12,500.00, receive 17,500.00, receive 20,000.00

Receive 2,500.00, pay 12,500.00, pay 17,500.00, pay 20,000.00

Saudi Arabia

South Africa

Zimbabwe

Zambia

Management should monitor the form, frequency and cost of entertainment and gifts dealers receive, have a clearly articulated policy towards the giving/receipt of gifts and ensure the policy is enforced.

As gifts and entertainment may be offered in the normal course of business, employees can offer inducements to conduct business and solicit them from the personnel of other institutions.

Although management should not monitor the form, frequency or cost of entertainment/gifts dealers receive, they may have a policy towards the giving/receipt of gifts and ensure the policy is enforced.

Gifts or entertainment should never be offered in the normal course of business, and employees must never offer any inducements to conduct business, nor solicit them from other institutions.

liquidity risk

business risk

operational risk

funding risk

1.3559 choice

1.3555-63

1.3559-62

1.3556-59

1 minus recovery rate, probability of default and exposure at default

exposure at origination, exposure at default and loss given default

loss given default, 1 minus recovery rate and exposure at default

exposure at origination, recovery rates and probability of default

Volume-weighted average overnight EUR deposit rate

Volume-weighted average overnight EUR LIBOR

Arithmetic average overnight EUR deposit rate

ECB overnight lending rate

The number of EUR per USD

The number of USD per EUR

Depends on whether the price is being quoted in Europe or the US

Depends on whether the price is being quoted interbank or to a customer

Is recommended where the complications of the transaction warrant the practice.

Is strictly forbidden.

Is considered bad practice.

Must have senior management approval.

+USD 373,599.00

÷USD 186,099.00

-USD 1,400.99

Nil

to promote globalization and deregulation of the financial markets

to maintain the professional level of competence and to disseminate a high level of ethical and professional behavior

to act as the official international market regulator in the absence of government regulation

to become the sole global corporation of wholesale financial market professionals

19/21

2.1/1.9

21/19

0.21/0.19

should be assumed to have zero duration

should be treated like other instantly variable rate liabilities, such as overnight money market borrowing.

should be assumed to have a low correlation with money market reference rates

represent a minor contributor to interest rate risk and can safely be disregarded

Paying a fixed rate of 4.12% per annum on a 30/360 basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.

Paying a fixed rate of 4.12% per annum on an actual/actual basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.

Paying a 5-year euro deposit and receiving a rate of interest of 4.12% on an actual/360 basis. Taking a 5-year euro deposit and paying a rate ol interest of 4.12% on an actual/360 basis.

The amount of the deal exceeds EUR 5 million.

The local regulator or central bank declines to intervene.

Litigation has already commenced.

At the request of one of the counterparties.

Buy USD spot, and buy and sell a 3-month EUR/USD FX swap

Sell EUR/USD in the spot market, borrow EUR for 3 months and lend USD for 3 months

Sell a 3-month EUR/USD outright forward

Any of the above

6-month AUD rates are higher than 6-month NZD rates

6-month AUD rates are lower than 6-month NZD rates

Spot AUD/NZD will be higher by approximately 170 points in 6 months

The AUD yield curve is positive, whilst the NZD curve is negative

SEK interest rates are higher than NOK interest rates

NOK interest rates are higher than SEK interest rates

NOK interest rates are higher than USD interest rates

SEK interest rates and NOK interest rates are converging

The dealers have good track records in their dealing both for the institution and for themselves.

There has been no previous conflicts of interest in the dealing room.

There is a clearly laFd down policy.

The dealers see no conflict of Interest in such dealing.

CDS are used to recover funds from defaulted swap counterparties.

CDS provide protection against specified credit events to the party receiving the CDS premium payments.

CDS provide protection against the default of the trade counterparty that buys the CDS.

CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.

The CD yields a higher rate of return

The CD has less credit risk

The CD is a transferable instrument

The CD has a shorter range of maturities

anywhere, even away from their own dealing premises

after-hours, but only if listed as such by management

after-hours, but only from their private residence

away from their broker’s dealing premises

CD

FRA

BA

ECP

within 2 hours after deal agreed with counterparty

before the value date of the trade

by the end of the trade date

within 24 hours

A long call option + long put option with the same strike prices

A short call option + short put option with the same strike prices

A long call option + short put option with the same strike prices

A short call option + long put option with the same strike prices

Ensure complaints are investigated by the senior management or a firm not involved in the disputed transaction.

Ensure complaints are rairly and independently investigated, in the first instance, by the ACIs Committee for Professionalism.

Ensure complaints are investigated by representatives of a broking firm not directly involved in the disputed transaction and selected by both parties to the dispute.

Ensure complaints are fairly and independently investigated, whenever practicable, by staff not directly involved in the disputed transaction.

0.7291-94

0.7294-91

1.3710-15

None of these

LEP

LBD

LBP

LNP

Be carried out at least three times a day.

Be agreed between the parties.

Be done at the end of each day.

Be decided by the broker.

It is the responsibility of the broking firm to conduct due diligence before transacting a deal.

All principals have the responsibility for assessing the creditworthiness of their counterparties or potential counterparties whether dealing direct or through a broking firm.

The principal is obliged to take into account any information provided by a broker as they are bound by a professional relationship.

All of the above.

2.1890

2.2125

2.1895

2.1885

Bought CHF against JPY spot and sold JPY against CHF 3-month forward

Sold CHF against JPY spot and bought CHF against JPY 3-month forward

Bought CHF against JPY spot and sold CHF against JPY 3-month forward

Bought JPY against CHF 3-month outright

The level of interest rates in the base currency

The level of interest rates in the quoted currency

The interest rates in the two currencies

Your expectations of the future spot rate

front running

ex ante trading

insider dealing

forward-facing

Within 24 hours of the deal.

Within two business days of the deal.

Before the value date.

As soon as possible.

Tier 3 capital requirements held against liquidity risk.

The nature and amount of high quality liquid assets a bank holds.

Central bank internal management processes regarding open market operations.

The transparent disclosure of illiquid on-balance sheet liabilities.

The following Monday

Saturday

Sunday

The previous Friday

8.30%

8.52%

8.54%

8.69%

One year

270 days

183 days

5years

ECP

BA or bank bill

Treasury bill

CD

Claims are not expected to be submitted after 15 days from the actual settlement date.

Claims of less than USD 5,000.00 are not expected to be submitted.

Claims are calculated on the full principal amount of the failed transaction. Interest rates are imposed by the agent banks, unless a higher negotiated rate is to be applied.

Acknowledgement of receipt of a claim should be confirmed within 48 hours by email or SWIFT.

A fixed-floating money market swap in which the floating rate is an overnight index fixed periodically over the term of the swap

A fixed-floating money market swap in which the floating rate is the mean of the overnight index over the term of the swap

A fixed-floating money market swap in which the floating rate is an overnight index compounded daily

A floating-for-floating rate swap in different currencies in which both floating rates are overnight indexes compounded daily

The Model Code emphasizes the importance of clear, concise documentation and on-going lines of communication.

Bank management must guarantee a fixed price execution to the counterparty.

The Model Code recommends that only experienced dealers should be allowed to take such orders.

Bank staff must secure the approval of the counterparty’s management to accept such orders.

Replacement risk

Settlement risk

Legal risk

Basis risk

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 00:00 CET deadline.

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 06:30 CET deadline.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank before the 00:00 CET deadline.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank after the 06:30 CET deadline.

Gradual positive slope

Steep positive slope

Flat

Inverted

documented and reported to the local regulator

communicated to local staff by a confidential internal circular

investigated immediately according to a properly documented procedure

reported to the ACI’s Committee for Professionalism to investigate and advise accordingly

A purchase of a cap and a sale of a floor

A purchase of a floor and a sale of a cap

A purchase of a cap and a purchase of a floor

A sale of a cap and a sale of a floor

entering into a pay fixed I receive variable standard interest rate swap

entering into a receive fixed I pay variable amortizing interest rate swap

entering into a EUR/USD FX swap

entering into a receive fixed I pay variable standard interest rate swap

0.9849

1.0154

1.9759

0.5061

1.2993

1.3023

1.3141

1.4323

Transaction exposure

Translation exposure

Economic exposure

None

to extend the contract to the next business day

to shorten the contract to the previous business day

The two parties involved agree to a new maturity date.

There is no standard market practice. ACIs Committee for Professionalism decides the issue on a case-by-case basis.

Treasury bill

Repo against Treasury bill collateral

They have the same yield

Cannot say

EUR 27,947,276.43

EUR 27,946,077.08

EUR 27,950,071.43

EUR 27,948,871.97

the issuer of a payment for the relevant trade distinct from the counterparty

the issuer of a payment for the relevant trade identical to the counterparty

the recipient of a payment for the relevant trade distinct from the counterparty

the recipient of a payment for the relevant trade identical to the counterparty

FRA

Futures

No difference

Too little information to decide

In the case of short date deposits, if the borrower is not prepared to repay the deposit prior to notice of receipt of the funds from the correspondent bank.

The borrower has no lending line for the placer of the funds and does not wish to be embarrassed by being unable to reciprocate.

If he secures a better rate elsewhere.

The borrower would be in breach of internal or regulatory depositor concentration limitations.

1.42%

1.39%

2.01%

4.21%

same way”

me too”

“par”, or “parity”

“join at”, or “support at”

A spot sale (purchase) and a forward purchase (sale)

A spot sale (purchase) and a forward sale (purchase)

An exchange of currencies on a date beyond spot and at a price fixed today

An exchange of currencies on a date beyond spot

Brokers should only show the names of banks to counterparties who have prime credit ratings.

Brokers should only show the names of banks to counterparties who provide good liquidity to the brokered market.

Brokers should only show the names of banks to counterparties whom they know well.

Brokers should only show the names of bank counterparties if both sides display a serious intention to transact

Credit risk

Settlement risk

Liquidity risk

Legal risk

1.0352

1.0353

1.0347

1.0348

Semi-annual bond yield of 3.75%

Annual bond yield of 3.75%

Semi-annual money market yield of 3.75%

Annual money market rate of 3.75%

EURIBOR

EONIA

EUREPO

EURONIA

EUR 50,015,416.67

EUR 50,016,219.18

EUR 50,016,444.44

EUR 50,016,958.33

you would take as bid rate the bid side of the 2-month forward and as offered rate the offered side of the 1-month forward

you would take as bid rate the offered side of the 2-month forward and as offered rate the bid side of the 1-month forward

you would take as bid rate the offered side of the 1-month forward and as offered rate the offered side of the 2-month forward

you would take as bid rate the bid side of the 1-month forward and as offered rate the bid side of the 2-month forward

installed on secret number known only to the chief dealer

installed and located in the office of the head of compliance

installed and located in such a way that reported transactions cannot be subsequently erased without senior management approval.

securely saved by recordings that have to be stored for at least a twelve-month period

A cash instrument

An exchange traded derivative

An interest rate derivative

A balance sheet instrument

149.66-74

149.69-71

63.52-53

63.51-54

IDR

RUP

INR

IND

to run a zero gap

to hold more interest rate sensitive assets than interest rate sensitive liabilities

to reduce the size of the balance sheet

to hold fewer interest rate sensitive assets than interest rate sensitive liabilities

Instruments qualifying for recognition as Tier 1 or Tier 2 capital will be substantially restricted.

Basel III does not include Tier 3 capital

There is a distinction between upper Tier 2 and lower Tier 2 capital

New non-common equity Tier 1 and Tier 2 instruments are more loss-absorbing than previously

With liquidity transfer pricing (LTP) banks attribute the costs, benefits and risks of liquidity to respective business units within a bank

With liquidity transfer pricing (LTP) banks are monitoring and diversifying their funding base

With liquidity transfer pricing (LTP) banks are agreeing with external liquidity providers on the fair market price of funds

Liquidity transfer pricing charges providers of funds for the cost of liquidity and users of funds for the benefit of liquidity

Positive, steepening

Positive, flattening

Inverted, steepening

Inverted, flattening

2.60%

2.75%

2.775%

2.813%

Legal documentation must be put in place as soon as possible after transaction.

All market participants should use the Modified Previous Business Day Convention.

The exact maturity (end) dates for transactions must be agreed as soon as possible after a transaction.

All market participants should use the Modified Following Business Day Convention.

1,239,925.60

1,237,873.80

1,240,694.79

1,242,720.50

a 1x2 FRA short position

a 1- against 2-month buy and sell forward/forward FX swap

a 1- against 2-month sell and buy forward/forward FX swap

a 1- against 2-month forward/forward long position

Time stamps on e-trading platforms need to be internally and globally synchronised to ensure appropriate tracking of trades

All records should be archived and appropriate audit trails must be maintained as required by the local Central Bank

Regular tests for loss of access to external liquidity platforms but not loss of service to clients should be undertaken

Testing of the system’s capability to cope with extreme volumes should be carried out annually

8% of RWA plus conservation buffer

10.5% of RWA plus conservation buffer

8% of RWA plus countercyclical buffer

10.5% of RWA plus countercyclical buffer

when the net spot position plus the forward position plus the delta equivalent of the foreign currency options book add up to zero

when the forward purchases of a foreign currency are equivalent to the equity position in that same currency

when the reverse repurchases of foreign currency are equal to the forward purchases of the functional currency

when the maturity structure of the assets in one currency is closely matched to the maturity structure of liabilities in another