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3I0-012
ACI Dealing Certificate Questions and Answers

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Viewing page 10 out of 15 pages

Viewing questions 136-150 out of questions

Questions # 136:

What happens if an instruction remains unmatched and/or unsettled through CLS Bank?

Options:

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.

Answer

Questions # 137:

VaR increases with:

Options:

lower correlation of underlying risk factors

a shorter time horizon

a lower confidence level

a higher confidence level

Answer

Questions # 138:

Under Basel rules the meaning of CCF is:

Options:

Currency Conversion Factor

Credit Conversion Factor

Credit Contribution Factor

Credit Collateralization Factor

Answer

Questions # 139:

How would you compute the bid side of the forward/forward FX swap points?

Options:

bid side of the near leg swap points minus offered side of the far leg swap points

bid side of the far leg swap points minus offered side of the near leg swap points

offered side of the far leg swap points minus bid side of the near leg swap points

offered side of the near leg swap points minus bid side of the far leg swap points

Answer

Questions # 140:

A forward-forward lender has an exposure to the risk of:

Options:

Higher interest rates

Lower interest rates

Flattening yield curve

Parallel shift downwards in the yield curve

Answer

Questions # 141:

An option premium is normally a positive function of:

Options:

the traded volume

the historical volatility of the price of the underlying commodity

the style (European or American) of the option

the implied volatility of the price of the underlying

Answer

Questions # 142:

What is a short strangle option strategy?

Options:

A short call option + long put option with a higher strike price than the call option

A long call option + long put option with a lower strike price than the call option

A short call option + short put option with a lower strike price than the call option

A long call option + long put option with higher strike price than the call option

Answer

Questions # 143:

A futures clearing house is:

Options:

The buyer to each seller and the seller to each buyer

A clearing agent only

The self-regulatory organization for the futures exchange

The owner of the futures exchange

Answer

Questions # 144:

Which of the following statements is correct?

Options:

An adjusted settlement amount is paid at the end of the FRA contract period that includes reinvestment interest for late payment

An unadjusted settlement amount is paid at the end of the FRA contract period

An adjusted settlement amount is paid at the start of the FRA contract period that is discounted for early payment

An unadjusted settlement amount is paid at the start of the FRA contract period

Answer

Questions # 145:

From the following AUD rates:

3M AUD (91-day) deposits 2.35%

3x6 AUD (90-day) FRA 2.55%

Calculate the 6-month implied cash rate.

Options:

2.37%

2.46%

2.55%

4.90%

Answer

Questions # 146:

Who takes the counterparty risk on the seller in a to-party repo?

Options:

The buyer

The to-party agent

A third-party guarantor

A central clearing counterparty

Answer

Questions # 147:

Spot EUR/USD is 1.3050-53 and EUR interest rates are lower than USD interest rates. Would you expect the forward points for EUR/USD to be:

Options:

added to spot

subtracted from spot

a negative value

Insufficient information to decide

Answer

Questions # 148:

Which of the following is required for institutions acting as prime brokers?

Options:

They must remain neutral and stay out of disputes between their customers.

They must rely on the execution venue to resolve disputes.

They must delegate the resolution of broken trades downstream to their clients.

They must take responsibility for the swift resolution of any disputes.

Answer

Questions # 149:

What does the Model Code recommend regarding “entertainment and gifts”?

Options:

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.

Answer

Questions # 150:

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called: