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ACI 3I0-012 - ACI Dealing Certificate

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Total 740 questions

Under the Model Code, it a broker shouts “done” or “mine” at the very moment a dealer shouts “off”:

A.

No deal is done.

B.

The deal is done.

C.

It should be resolved in consultation with senior management.

D.

The central bank should be consulted.

What does the Model Code say about netting?

A.

Market participants are strongly recommended to net bilateral transactions with counterparties where activity justifies it.

B.

Market participants should establish payments netting agreements with cross-border 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.

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.

Does not regard this as a good practice.

B.

Urge dealers to be bear this in mind, as this is common practice for capital market deals.

C.

Does not comment on this matter.

D.

Recommends that national ACI Associations deal with this according to their local customs.

The use of mobile phones within the dealing room is not considered good practice except

A.

In volatile markets.

B.

When dealing with emerging markets.

C.

In an emergency.

D.

When quoting for information only.

A 3-month (90-day) USD deposit is 5.5625% and 6-month (180-day) USD deposit is 5.75%. What is the 3x6 USD deposit rate?

A.

5.8342%

B.

5.8561%

C.

5.8425%

D.

5.75%

What is Model Codes recommendation on the settlement of dirrerences by “points”?

A.

It is not favoured.

B.

It may be permitted when allowed by the local market regulator.

C.

Itis unconditionally accepted bythe Code.

D.

It is allowed only if senior management approval is obtained.

When a broker makes an error on payment instructions The Model Code recommends that

A.

The broker remains liable for the resulting difference for 3 full business days following the date of the transaction.

B.

The broker remains liable until the error is discovered.

C.

The broker is not liable at all.

D.

The broker’s liability should be limited as he is not in a position to directly rectify the situation.

In all dealing conversations, the Model Code strongly recommends:

A.

Dealers stick to market terminology in order to avoid the impression that they are offering an advisory or fiduciary role.

B.

Dealers clarity what is being proposed rather than using any terminology that could be misinterpreted.

C.

Dealers restrict themselves to terminology listed and explained in Chapter 11 of the Model Code.

D.

Dealers define complex terminology in the confirmation of a deal.

You are quoted the following market rates:

spot EUR/GBP 0.6670

6M (182-day) EUR 2.35%

6M (182-day) GBP 375%

What is 6-month EUR/GBP?

A.

0.6675

B.

0.6715

C.

0.6717

D.

0.6718

If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

A.

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

B.

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

C.

Sell a 3-month EUR/USD outright forward

D.

Any of the above

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.

+121

B.

+120

C.

-116

D.

-119

What is the purpose of a long strangle option strategy?

A.

To anticipate very low volatility in the price of the underlying commodity

B.

To anticipate moderately high volatility in the price of the underlying commodity

C.

To anticipate moderate volatility in the price of the underlying commodity

D.

To anticipate very high volatility in the price of the underlying commodity

Which of the following is true?

A.

The Euronext.LIFFE short sterling futures contract has a tick value of GBP 12.50 and a face value of GBP 1,000,000

B.

The Euronext.LIFFE JPY futures contract has a tick value of JPY 2,500 and a face value of JPY 1,000,000,000

C.

The CME eurodollar futures contract has a minimum price interval of one-quarter tick

(0.0025) for the nearest contract

D.

All of the above

What type of institution is the typical issuer of bank bills?

A.

Credit institution

B.

lnvestment bank

C.

Corporate

D.

All of the above

Dealers are allowed to trade for their own account if:

A.

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

B.

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

C.

There is a clearly laFd down policy.

D.

The dealers see no conflict of Interest in such dealing.