Pass the ACI-Financial 3I0-012 Questions and answers with ExamsMirror

Intrinsic value but no time value

Time value but no intrinsic value

Both time value and intrinsic value

Neither time value nor intrinsic value

-30

+29

-29

+30

Credit institution

Investment bank

Corporate

Central Bank

An upward parallel shift of interest rates will cause a loss of income if the rate-sensitivity of a bank’s liabilities is higher than the rate-sensitivity of its assets.

A bank will lose income if it has more rate-sensitive liabilities than rate-sensitive assets.

Falling interest rates will always result in mark-to-market profits on short positions in fixed rate securities.

Rising interest rates can result in mark-to-market losses on fixed-rate assets.

He buys CHF 5,000,000.00 at 0.9423

He buys CHF 5,000,000.00 at 0.9426

He buys USD 5,000,000.00 at 0.9423

He buys USD 5,000,000.00 at 0.9426

minimum tier 1 capital of 4.5% and minimum total capital plus a conservation buffer of 10.5%

minimum tier 1 capital of 6% and minimum total capital including conservation buffer of 8%

minimum tier 1 capital of 4% and minimum total capital including conservation buffer of 10.5%

minimum tier 1 capital of 6% and minimum total capital including conservation buffer of 10.5%

To reduce the number and size of payments and transfers

To reduce exposure to credit risk

To reduce the size of the balance sheet

All of the above

Ensure that your counterparty understands the terms under which your bank accepts the order.

Ensure that your counterpart can be contacted in the event of unusual situations or events or extremely volatile market conditions.

Ensure that your counterparty understands that any guarantee or fixed price execution requires agreement in writing.

All of the above.

innovative hybrid capital instruments with incentives to redeem

common shares issued by bank

retained earnings

stock surplus (share premium)

The buyer can liquidate the collateral

The buyer has to liquidate the collateral

The buyer cannot liquidate the collateral until the seller is declared insolvent

A court is appointed to decide what happens to the collateral

Subject to local legal requirements, this matter is one for bank management to decide.

Bank management should encourage such activities because it allows banks to monitor the gambling habits of their staff.

Where this is allowed, bank management should have a clearly defined policy and written procedures.

Bank management should allow staff to deal for their personal account on a case to case basis.

123.44

123.65

123.86

123.90

Banks should not ask brokers to disclose details of third party transactions unless they are between overseas principals.

Banks should not ask brokers to disclose details of third party transactions unless these transactions are already settled.

Banks should not ask brokers to disclose transactions between third parties in any circumstances.

Banks should not ask brokers for details of third party transactions unless senior management has approved.

the fixing spot rate

the daily high

the days’ average rate

the average rate over the NDF period

GBP 10,000

EUR 10,000

GBP 6,990

EUR 6,990