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Exam 1: ACI Dealing Certificate-Part A

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Question 1

Multiple Choice

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Deliberately inputting incorrect big figures into an electronic dealing platform is:

A) Technically impossible on electronic platforms
B) Not an uncommon practice and something which profe
C) Not good practice.
D) A criminal offence.

E) A) and C)
F) All of the above

Correct Answer

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C

Question 2

Multiple Choice

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The Model Code strongly recommends that intra-day oral deal checks should:

A) Be conducted out at the end of the morning and aft
B) Be only be conducted after the close of business.
C) Be mutually agreed between the bank and the broker
D) Be the responsibility of the broker.

E) A) and B)
F) A) and C)

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Question 3

Multiple Choice

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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?

What type of risk would describe the failure of a back office to make adequate margin calls on repo positions?

Dealers are allowed to trade for their own account if:

Payment and settlement instructions should be passed:

What is the primary function of GC repo, particularly very short -term transactions?

If a dealer has interest on one side, and the other side is dealt away, the broker should:

You are quoted the following market rates: spot USD/JPY 123.65 1M (30-day) USD. 2.15% 1M (30-day) JPY 0.10% What is 1-month USD/JPY?

A bond is trading 50 basis points special for 1 week, while the 1-week GC repo rate is 3.25%. If you held GBP 10,500,000 of this bond, what would be the cost of borrowing against it in the repo market?

You have quoted your customer the following eurodollar deposit rates: 1M 5.375-25% 2M 5.4375-3125% 3M 5.5-375% The customer says, "I give you USD 20 million in the two's". What have you done?

When dealing with customers, financial market professionals are advised by the Model Code to clarify that all transactions are entered into solely at each partys risk by explicitly agreeing in writing that:

Market participants should, where activity justifies it, aim to reduce settlement and related credit risk on currency transactions by:

Which of the following will tend to have the lowest yield?

Which of the following rates represents the highest investment yield in the euromarket?

The Committee for Professionalism strongly recommends intra-day oral deal checks to help reduce the number and size of differences, particularly when dealing through voice- brokers, for deals involving foreign counterparties, in faster moving markets such as FX and when dealing in other instruments which have very short settlement periods. This checking should:

If you buy GBP 2,000,000 against USD at 1.6020; GBP 1,000,000 at 1.6035 and GBP 3,000,000 at 1.6028, what is the average rate of your position?

Which of the following is true?

In the unforeseen event that a particular maturity date is declared a public holiday, what is normal market practice for spot FX? :

A CD with a face value of EUR10 million and a coupon of 3% was issued at par for 182 days and is now trading at 3.10% with 120 days remaining to maturity. What has been the capital gain or loss since issue?