ACI 002-101 ACI Dealing Certiļ¬cate New Version Exam QUESTION & ANSWERS https://www.genuinedumps.com/002-101-exam-questions.html QUESTION 1 If the yield curve is upward sloping, a bank would not profit from: A. B. C. D. borrowing long and lending short borrowing short and lending long paying a higher rate on deposits than the market increasing the banks leverage Correct Answer: A QUESTION 2 A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him? A. B. C. D. 1.4320-25 1.4318-23 1.4315-20 1.4323-26 Correct Answer: C QUESTION 3 What is the probability of an at-the-money option being exercised? A. B. C. D. Less than 50% probability More than 50% probability 50% probability Zero probability Correct Answer: C QUESTION 4 Are the forward points materially affected by changes in the spot rate? A. never B. Only for very large movements and longer terms https://www.genuinedumps.com/002-101-exam-questions.html C. spot is the principal influence D. always Correct Answer: B QUESTION 5 Under Basel III rules the meaning of RSF is: A. B. C. D. Riskless Stable Funding Required Stable Funding Riskless Supervised Funding Reviewed Supervisory Factor Correct Answer: B QUESTION 6 What type of institution is the typical issuer of bank bills? A. B. C. D. Credit institution lnvestment bank Corporate All of the above Correct Answer: C QUESTION 7 A forward-forward loan creates an exposure to the risk of: A. B. C. D. Parallel shift downwards in the yield curve Steepening yield curve Higher interest rates Lower interest rates https://www.genuinedumps.com/002-101-exam-questions.html Correct Answer: C QUESTION 8 An interest rate guarantee (IRG) is: A. B. C. D. A collar AnFRA An option on an FRA AnIRS Correct Answer: C QUESTION 9 If 6-month EUR/AUD is quoted at 29/32, which of the following statements is correct? A. B. C. D. AUD rates are higher than EUR rates in the 6-month There is not enough information to decide There is a positive EUR yield curie EUR rates are higher than AUD rates in the 6-month Correct Answer: A QUESTION 10 In spite of having agreed to a deal, dealers are not bound to the deal if it is subject to documentation. The Model Code: A. B. C. D. Urge dealers to be bear this in mind, as this is common practice for capital market deals. Recommends that national ACI Associations deal with this according to their local customs. Does not comment on this matter. Does not regard this as a good practice. Correct Answer: D https://www.genuinedumps.com/002-101-exam-questions.html QUESTION 11 A CD with a face value of USD 250,000,000.00 was issued at par with a coupon of 5% for 91 days.You buy it in the secondary market when it has 30 days remaining to maturity and is trading at5.25%. How much do you pay? A. B. C. D. USD 252,056,972.97 USD 252,028,916.32 USD 248,911,014.31 USD 250,000,000.00 Correct Answer: A QUESTION 12 The Interest Rate Parity Theorem states that: A. Selling a low interest rate currency to invest a high interest rate currency will only be profitable if one hedges the currency risk B. Interest rates in different currencies differ due to differences in expectations about inflation C. Selling a low interest rate currency to invest in a high interest rate currency should not be profitable if one hedges the currency risk D. Interest rates in different currencies will tend to move into line with each other over time Correct Answer: C QUESTION 13 What does the Model Code say about netting? A. Market participants should establish payments netting agreements with cross-border counterparties where activity justifies it. B. Market participants are strongly recommended to net bilateral transactions with counterparties where activity justifies it. C. Market participants should establish legally viable bilateral netting agreements with counterparties where activity justifies it. D. Market participants should establish legally viable multilateral netting agreements where activity justifies it. Correct Answer: C https://www.genuinedumps.com/002-101-exam-questions.html QUESTION 14 Which one of the following statements is incorrect under Basel III? A. B. C. D. New non-common equity Tier 1 and Tier 2 instruments are more loss-absorbing than previously Instruments qualifying for recognition as Tier 1 or Tier 2 capital will be substantially restricted. There is a distinction between upper Tier 2 and lower Tier 2 capital Basel III does not include Tier 3 capital Correct Answer: C QUESTION 15 Which of the following is true regarding the consummation of a deal? A. B. C. D. written confirmations always override terms verbally agreed to verbal agreements are considered binding deals agreed to verbally can be done subject to documentation verbal agreements are never to be considered legally binding Correct Answer: C QUESTION 16 At the end of the day, you are short CHF 3,500,000.00 against SEK at 6.9275. You are asked to revalue your position at 6.9190. What is the resulting profit or loss? A. B. C. D. Loss of CHF 29,750.00 Profit of SEK 29,750.00 Profit of CHF 29,750.00 Loss of SEK 29,750.00 Correct Answer: B QUESTION 17 The Model Code recommends that, in the case or complaints about transactions, management should: A. 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. https://www.genuinedumps.com/002-101-exam-questions.html B. Ensure complaints are rairly and independently investigated, in the first instance, by the ACIs Committee for Professionalism. C. Ensure complaints are investigated by the senior management or a firm not involved in the disputed transaction. D. Ensure complaints are fairly and independently investigated, whenever practicable, by staff not directly involved in the disputed transaction. Correct Answer: D QUESTION 18 Which of the following is not transferable? A. B. C. D. Euro certificate of deposit CP US Treasury bill Call deposit Correct Answer: D QUESTION 19 It is now permissible in most markets for brokers to be owned by banks and other principals. Where there is shared management, or a share holding or other investment in a broker by a counterparty: A. B. C. D. The broker should advise the other counterparty of the connection. The matter is covered in the Model Code. The broker is not obligated to reveal the connection provided Chinese Walls are in place. The broker is not obligated to reveal the connection in the professional market. Correct Answer: A QUESTION 20 To curb attempted fraud, banks should: A. All of the above. B. Require greater vigilance by the management and staff. C. Ensure that details of all telephone deals which do not include pre-agreed standard settlement instructions are confirmed by telex or similar means without delay. https://www.genuinedumps.com/002-101-exam-questions.html D. Take particular care when the beneficiary is a third party to the deal. Correct Answer: A QUESTION 21 When performing a gap analysis, into which of the following time buckets should a 5-year floating-rate note with a 6-month LIBOR coupon be slotted? A. It should be weighted and apportioned in each of the time buckets in accord with the periodic coupon payments. B. the 6-month bucket C. the 5-year bucket D. the 2.5-year bucket Correct Answer: B QUESTION 22 If you buy GBP 2,000,000 against USD at 1.6020; GSP 1,000,000 at 1.6035 and GBP 3,000,000 at1.6028, what is the average rate of your position? A. B. C. D. 1.6030 1.6023 1.6035 1.6027 Correct Answer: D QUESTION 23 In order to be introduced in a controlled manner, which areas should be involved before a new product or business strategy is launched? A. B. C. D. All relevant areas Senior management only Front Office and Treasury Middle Office Product Control, Legal and Compliance, Front Office, Treasury and Operations https://www.genuinedumps.com/002-101-exam-questions.html Correct Answer: A QUESTION 24 You are quoted the following rates: Spot cable 1.5340-43 0/N cable swap 0.14/0.11 T/N cable swap 0.16/0.13 S/N cable swap 0.43/0.37 At what rate can you buy cable for value tomorrow? A. B. C. D. 1.534287 1.534313 1.534284 1.534316 Correct Answer: D QUESTION 25 What is the ISO code for the Indian rupee? A. B. C. D. IDR INR IND RUP Correct Answer: B QUESTION 26 Under Basel rules the risk weight for MA-rated claims on corporate in the standardized approach A. B. C. D. 0% 20% 15% 75% https://www.genuinedumps.com/002-101-exam-questions.html Correct Answer: B QUESTION 27 Which of the following does not represent an operational risk as defined by Basel rules? A. B. C. D. loss incurred from the use of incorrect documentation theft of information damage to an organization through loss of its reputation or standing market manipulation Correct Answer: C QUESTION 28 The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are: A. B. C. D. All of the above Guaranteed Exchange-traded Standardised Correct Answer: A QUESTION 29 What is the result of combining a 1-month buy and sell FX swap with a 2-month sell and buy FX swap? A. B. C. D. a 1- against 2-month buy and sell forward/forward FX swap a 1- against 2-month forward/forward long position a 1x2 FRA short position a 1- against 2-month sell and buy forward/forward FX swap Correct Answer: D https://www.genuinedumps.com/002-101-exam-questions.html QUESTION 30 By what means should a financial institution preferably submit SSI changes and notifications to its clients? A. B. C. D. e-mail MT670/671 SWIFT message fax or letter MTn99 SWIFT message Correct Answer: B QUESTION 31 What is replacement cost a function of? A. B. C. D. None of the above Both of the above Credit risk Market risk Correct Answer: C QUESTION 32 How would you delta hedge a deeply in-the-money" short put option?" A. Go long of the underlying commodity equal to 50% of the size of the option contract B. Go short of the underlying commodity equal to more than 5O% of the full size of the option contract C. Go short of the underlying commodity equal to 50% of the size of the option contract D. Go long of the underlying commodity equal to more than 50% of the full size of the option contract Correct Answer: B QUESTION 33 3-month USD/CHF is quoted at 12/10. Interest rates in Switzerland are reduced but USD rates (which are higher) are unchanged. What would you expect the 3-month forward USD/CHF rate to be? A. unchanged https://www.genuinedumps.com/002-101-exam-questions.html B. 10/8 C. 15/13 D. 6/4 Correct Answer: C QUESTION 34 What is the meaning of CCP within the Basel framework? A. B. C. D. Collateralized Clearing Process Collateralized Counterparty Protection Central Clearing Counterparty Collateralized Credit Protection Correct Answer: C QUESTION 35 Under what circumstances are banks allowed to park" deals or positions with a counterparty?" A. B. C. D. only if the two counterparties to the deal agree Not under any circumstances, since the parking" of deals or positions should be prohibited" only if parking" of deals or positions has been approved by senior management" in conditions of exceptional volatility Correct Answer: B QUESTION 36 An 'at-the-money' call option: A. B. C. D. Costs less than an 'out-of-the-money' call option Costs the same as an 'in-the-money' put option Costs more than an 'in-the-money' call option Costs more than an 'out-of-the-money' call option https://www.genuinedumps.com/002-101-exam-questions.html Correct Answer: D QUESTION 37 You hear from several counterparties that a major market participant has taken major losses on long USD/ JPY positions. You know the reports are untrue, as you have in fact bought large amounts of USD/JPY from that very firm, which means that the impact of the reports on the market would be helpful to your position. A. As you have heard the reports from other parties, you are entitled to pass them on to other market participants. B. You should contradict the reports. C. You should not pass any information you know to be false. D. As you have heard the reports from other parties, you are entitled to pass them on to market news services. Correct Answer: B QUESTION 38 What is the effect of netting? A. B. C. D. To reduce the size of the balance sheet To reduce the number and size of payments and transfers All of the above To reduce exposure to credit risk Correct Answer: C https://www.genuinedumps.com/002-101-exam-questions.html
