3I0-008 by ACI Actual Free Exam Q&As

Question 1

Click on the Exhibit Button to view the Formula Sheet. Brokers should confirm all transactions:

A. Only if the transaction is not for a marketable amount . B. Initially by fax or other acceptable electronic means, then in writing. C. Only if the deal is between overseas counterparties and for value today. D. To both counterparties immediately by fax or other acceptable electronic means.

Discussion 0

Correct Answer: D Vote an answer

Question 2

Click on the Exhibit Button to view the Formula Sheet. You buy a 181-day 2.75% CD with a face value of USD 1,500,000 at par when it is issued. You sell it in the secondary market after 150 days at 2.60%. What is your holding period yield?

A. 2.75% B. 2.60% C. 2.775% D. 2.813%

Discussion 0

Correct Answer: C Vote an answer

Question 3

Click on the Exhibit Button to view the Formula Sheet. Confirmations must be sent out:

A. Immediately after the deal is done. B. By electronic media only, e.g. fax, telex. C. Not later than the value date of the first leg of the transaction. D. As quickly as possible after the deal is done.

Discussion 0

Correct Answer: D Vote an answer

Question 4

Click on the Exhibit Button to view the Formula Sheet. Deals transacted direct or via a broker prior to 5:00am Sydney time on Monday morning:

A. Cannot be entered into without the approval of the local regulator. B. Must be approved by senior management before confirmation. C. Are not considered to have been done in normal conditions or normal market hours. D. Are invalid.

Discussion 0

Correct Answer: C Vote an answer

Question 5

Click on the Exhibit Button to view the Formula Sheet.
You are quoted the following market rates:
spot EUR/CHF 1.1005
6M (180-day) EUR 3.45%
6M (180-day) CHF 1.25%
What are the 6-month EUR/CHF forward points?

A. -116 B. +120 C. +121 D. -119

Discussion 0

Correct Answer: D Vote an answer

Question 6

Click on the Exhibit Button to view the Formula Sheet. If spot GBP/CHF is quoted 2.3875-
80 and the 3-month forward outright is 2.3660-70, what are the forward points?

A. 215/210 B. 210/215 C. 21/21.5 D. 21.5/21

Discussion 0

Correct Answer: A Vote an answer

Question 7

Click on the Exhibit Button to view the Formula Sheet. How could your firm avoid the risks of dealing through an agent with an unknown principal?

A. In practice, the risks are minimal provided you deal through a reputable agent. B. It is not possible to avoid these risks unless you demand that the principal is identified before each transaction. C. Have the intermediary identify the principal to the compliance, legal or credit functions, but only give codes to your dealers. D. Insist on a guarantee by the intermediary.

Discussion 0

Correct Answer: C Vote an answer

Question 8

Click on the Exhibit Button to view the Formula Sheet.
You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD
10 million interest rate swap with exactly two years to maturity. 6-month LIBOR for the next payment date is fixed today at 4.95%.
How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

A. sell a strip of 6x12, 12x18 and 18x24 FRAs B. buy a strip of 0x6, 6x12, 12x18 and 18x24 FRAs C. buy a strip of 6x12, 12x18 and 18x24 FRAs D. sell a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

Discussion 0

Correct Answer: A Vote an answer

Question 9

Click on the Exhibit Button to view the Formula Sheet. If a broker refers to "the payer of 5- year euro at 4.12", what is this party doing?

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

Discussion 0

Correct Answer: C Vote an answer

Question 10

Click on the Exhibit Button to view the Formula Sheet. Which of the following will tend to have the lowest yield?

A. BA B. Interbank deposit C. Treasury bill D. Certificate of deposit

Discussion 0

Correct Answer: C Vote an answer

Question 11

Click on the Exhibit Button to view the Formula Sheet. What is the ISO code for the currency of Hungary?

A. HUG B. HKD C. HUF D. HRN

Discussion 0

Correct Answer: C Vote an answer

Question 12

Click on the Exhibit Button to view the Formula Sheet. Selling a FRA is the same as:

A. Opening a positive gap B. Making a forward-forward loan C. Going over-borrowed D. All of the above

Discussion 0

Correct Answer: B Vote an answer

Question 13

Click on the Exhibit Button to view the Formula Sheet. The Model Code rules that deals at non-current rates:

A. Should be marked to market daily. B. Require prior regulatory approval. C. Require the prior express permission of the senior management of both counterparties. D. Are forbidden.

Discussion 0

Correct Answer: C Vote an answer

Question 14

Click on the Exhibit Button to view the Formula Sheet. Where repos or securities lending transactions are entered into, the Model Code recommends:

A. All of the above. B. Documentation should be in place beforehand. C. Copies of the underlying documentation should be lodged with regulators. D. Management should approve all transactions.

Discussion 0

Correct Answer: B Vote an answer

ACI DEALING CERTIFICATE - 3I0-008 Exam Practice Test