ACI 3I0-012 Dumps

Hybex should become a payer of a fixed rate on a swap against receipt of LIBOR.

Hybex should become a receiver of a floating rate on a swap against payment of a fixed rate

Hybex should become a receiver of a fixed rate on a swap against payment of LIBOR D.

Hybex should become a receiver of a floating rate on a swap against payment of LIBOR

The face value of the CD

More than the face value

Less than the face value

Too little information to decide

1.4340

1.4343

1.4337

1.4335

EUR 1,388,89

EUR 1,561.11

EUR 2,255.56

EUR 2,951.39

the trader acquires additional exposure in the hedged item.

the hedging instrument is sold, terminated or exercised.

the hedged item is sold or settled.

a hedge fails the effectiveness test.

the value date of the financial centre that is open

the next business day of the financial centre which is closed

the next business day when both New York and Tokyo are open

the previous business day when both New York and Tokyo are open

Volume-weighted average overnight EUR deposit rate

Volume-weighted average overnight EUR LIBOR

Arithmetic average overnight EUR deposit rate

ECB overnight lending rate

Brokers should only show the names of banks to counterparties who have prime credit ratings.

Brokers should only show the names of banks to counterparties who provide good liquidity to the brokered market.

Brokers should only show the names of banks to counterparties whom they know well.

Brokers should only show the names of bank counterparties if both sides display a serious intention to transact

Prices quoted by brokers should be taken to be firm in marketable amounts unless otherwise qualified

Prices quoted by brokers should be taken to be indicative in marketable amounts unless otherwise qualified

Prices quoted by brokers should be taken to be firm in amounts of 1,000,000.00 of the quoted currency unless otherwise qualified

Prices quoted by brokers should be taken to be indicative in amounts of 1,000,000.00 of the base currency unless otherwise qualified

Unilateral collateral obligations to sovereign counterparties provide liquidity to banks.

Under Basel III commercial banks are most likely to incur lower costs to service their sovereign clients.

While banks usually do not call for collateral from sovereign counterparties, they must provide collateral for the offsetting hedge transactions which are undertaken with commercial counterparties.

Uncollateralised exposures to sovereign counterparties will not require additional regulatory capital to be set aside against potential credit losses

Profiles for functions are encouraged and should be reviewed semi-annually by a manager.

Developers should have unrestricted access to production systems.

Access to production systems should be rigorously controlled.

Users should not have access to change system functionalities.

EUR 11,035,336.41

EUR 11,035,351.74

EUR 11,039,752.32

EUR 11,039,767.65

You pay CAD 20,000.00

You receive CAD 20,000.00

You pay CAD 19,952.61

You receive CAD 19,952.61

beta

gamma

delta

theta

Credit institution

Investment bank

Corporate

Central Bank

anytime after the swap is transacted

before the swap is transacted

immediately after the swap is transacted

no less than 24 hours after the completion of the swap

You will have to pay USD 312.50

You will receive USD 312.50

You will have to pay USD 3,125.00

You will receive USD 3,125.00

USD rates are higher than CAD rates in the 6-month

CAD rates are higher than USD rates in the 6-month

There is a positive USD yield curve

There is not enough information to decide

capital adequacy regulations in Pillar 1

market risk and Tier 3 capital elements

internal management procedures subject to supervisory review in Pillar 2

market discipline, disclosure and transparency in Pillar 3

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

is a new rule that compares liquid asset levels in banks to their available equity capital

spells out a modernized system for calculating the required minimum reserve that banks must hold at the central bank

compares liquid and reliably liquidating assets to expected cash outflows from specified run-off rates for various liability classes under a short-term stress scenario

tied directly into the internal ratings-based approach for determining the liquidity of credit-counterparties

lower correlation of underlying risk factors

a shorter time horizon

a lower confidence level

a higher confidence level

105.085

105.265

108.62

105.155

7.09%

7.03%

6.90%

6.95%

The buyer to each seller and the seller to each buyer

A clearing agent only

The self-regulatory organization for the futures exchange

The owner of the futures exchange

The Model Code emphasizes the importance of clear, concise documentation and on-going lines of communication.

Bank management must guarantee a fixed price execution to the counterparty.

The Model Code recommends that only experienced dealers should be allowed to take such orders.

Bank staff must secure the approval of the counterparty’s management to accept such orders.

it need not be confirmed between the counterparties as the broker confirms it immediately with both counterparties

it should also be confirmed directly between the two counterparties

it is important to note that broker confirmations are bilateral confirmations between the principals of the trade

the dealer should obtain acknowledgement that the deal has been agreed to but may assume agreement to the trade in the absence of such acknowledgement

Bought and sold 3-month EUR/USD through the swap

Sold and bought 3-month EUR/USD through the swap

Made the quote

Cannot say

EUR 28,228,360.69

EUR 28,229,572.15

EUR 25,080,729.18

EUR 25,081,805.55

2.37%

2.46%

2.55%

4.90%

consult the local ACI national association

bring the matter to the appropriate court of justice

examine the complaint

bring the matter to the attention of the appropriate regulatory body

Delivery repo

HIC repo

To-party repo

“Double dipping” is never a risk in any type of repo

One year

270 days

183 days

5years

Delivery repo

HlC repo

Tri-party repo

There is no real difference

The practice of making a transaction subject to documentation is not regarded as good practice.

It urges dealers to be bear in mind that this is a common practice for capital market deals.

The Model Code does not comment on the matter.

It recommends that national ACI Associations deal with this issue according to their local customs.

front running

ex ante trading

insider dealing

forward-facing

The level of interest rates in the base currency

The level of interest rates in the quoted currency

The interest rates in the two currencies

Your expectations of the future spot rate

0.008520

0.009510

0.009515

0.009518

they have good track records in dealing both for their institution and for themselves

there have been no previous conflicts of interest in the dealing room

there is a clearly defined and written policy about the matter

the dealers see no conflict of interest in such dealing

Dealers may seek a compensation payment in favor of the bank or an adjustment to brokerage bills from the broker for switching names.

If requested by a broker to clear a transaction through name switching, a dealer must ensure that such activities have the prior approval of senior management.

The practice of name switching/substitution is neither acceptable nor desirable.

Name switching/substitution transactions should be executed as promptly as possible not considering credit limits and policy guidelines.

Market participants should strictly adhere to the rules issued by local regulators, supervisors or central banks in order to maintain efficiency and avoid disputes.

Even if local provisions are in place, market participants should only adhere to the ACI best practices of the Model Code in order to maintain efficiency and avoid disputes.

Participants must at all times adhere to the rules issued by local regulators, supervisors or central banks even if these rules or procedures conflict with any provision of an existing written agreement.

Parties may unilaterally decide whether they wish to adhere to the terms of the agreement or to amend the terms of the transaction to follow the relevant procedure.

are invalid

must be approved by senior management before confirmation

cannot be entered into without the approval of the local regulator

are not considered to have been done in normal conditions or normal market hours

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.

USTreasury bill

CD

Interbank deposit

ECP

Sending settlement instructions

Investigating settlement discrepancies

Keeping a contact list of all back office staff of the bank’s counterparties

Exchanging standard settlement instructions (SSIs)

The name of Banks A and B.

The name of Bank B only.

The amount that was bid but not the name of Bank A.

None of the above

Survive a liquidity crisis

Absorb credit losses

Absorb any type of unexpected loss

Absorb any type of expected loss

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

+CAD 23,000

+CAD 13,000

+CAD 16,000

-CAD 13,000

3,704,500

6,748,549

3,703,000

6,751,283

6-month AUD rates are higher than 6-month NZD rates

6-month AUD rates are lower than 6-month NZD rates

Spot AUD/NZD will be higher by approximately 170 points in 6 months

The AUD yield curve is positive, whilst the NZD curve is negative

HUG

HKD

HRN

HUF

Will encourage clients to do more business.

Will help prevent potential litigation.

Will help banks sell sophisticated risk management solutions.

Is required by all regulators.

Short USD 1.50 million at 112.60

Short USD 3.50 million at 111.75

Long USD 1.50 million at 111.10

Long USD 3.50 million at 111.55

Loss of GBP 17000

Profit of GBP 17,000

Loss of EUR 17,000

Profit of EUR of 17,000

+USD 373,599.00

÷USD 186,099.00

-USD 1,400.99

Nil

1.32%

1.29%

1.28%

0.65%

Management should ensure dealers fully understand the systems they use and dealers should read the manuals.

Management, dealers and vendors share responsibility.

Dealers are required to pass the ACI Dealing Certificate before being allowed to access electronic dealing platforms.

Given the wide range of electronic dealing platforms used by banks, it is the responsibility of the vendors to ensure individual users are adequately trained.

The bank.

The local bankers association.

The local regulator.

Negotiation between the bank and client.

You may not be able to ensure that your firm can avoid suspicion of trading on non-public information or other allegations of bad or illegal trading practice.

You may not be able to net your exposure in an insolvency.

You may not be able to net your exposure for capital adequacy purposes.

All of the above.

Between +0.5 and +1

+0.5

Between 0 and +0.5

Zero

1,239,925.60

1,237,873.80

1,240,694.79

1,242,720.50

Documentation should be in place beforehand.

Management should approve all transactions.

Copies of the underlying documentation should be lodged with regulators.

All of the above.

Always decline gifts.

Give the gift to charity.

Keepthe gift.

Report the gift to management.

unchanged

15/13

10/8

6/4

to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits, to increase the size of the balance sheet

to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits

to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to decrease the size of the balance sheet

to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to increase the size of the balance sheet

Buyer

Seller

Issuer

It depends on the agreement between the buyer and seller

interest rate, currency, equity and commodity risk

interest rate, currency, equity and default risk

interest rate, equity, liquidity and default risk

legal, reputation and regulatory risk

verbal agreements are considered binding

written confirmations always override terms verbally agreed to

deals agreed to verbally can be done subject to documentation

verbal agreements are never to be considered legally binding

Collateralized Clearing Process

Central Clearing Counterparty

Collateralized Counterparty Protection

Collateralized Credit Protection

Go short of the underlying commodity equal to 50% of the size of the option contract

Go long of the underlying commodity equal to 50% of the size of the option contract

Go long of the underlying commodity equal to more than 50% of the full size of the option contract

Go short of the underlying commodity equal to more than 5O% of the full size of the option contract

adding up expected vault cash outflows, ATMs and other cash points operated by the institution across all branches

establishing a forward cash flow plan that takes account of all contractual and behavioral cash flows related to assets and liabilities

the net cash flow from investment activities in the IFRS consolidated Statement of Cash Flows for prior periods

subtracting short-term liabilities from short-term assets

The “big figure” should not be included in outright quotations.

In order to avoid misunderstandings, the “big figure” should not be mentioned when repeating the details (facts/rates) of the deal.

For the sake of brevity and efficiency, “big figures” should never be quoted at all in spot FX trading.

The Model Code recommends that the “big figure” be included in all outright and spot FX quotations.

a given deposit with a term of six months

a taken deposit with a term of three months

a given deposit with a term of three months and a taken deposit with a term of six months

a taken deposit with a term of three months and a given deposit with a term of six months

Credit Value Adaption

Call Value Adaption

Credit Value Adjustment

Counterpart Value Adjustment

the price differential between spot and forward gold prices

the rate at which dealers will lend gold against US dollars

the implied forward price of gold

the price of gold for forward delivery

Reviewed Supervisory Factor

Required Stable Funding

Riskless Stable Funding

Riskless Supervised Funding

under reference

firm, but not necessarily in marketable amounts

firm, unless otherwise qualified

merely indicative

for a short length of time, usually 30 seconds

until the price has been taken “off” by the dealer

for a short length of time, typically a matter of seconds

for a minute or two

a 1x2 FRA short position

a 1- against 2-month buy and sell forward/forward FX swap

a 1- against 2-month sell and buy forward/forward FX swap

a 1- against 2-month forward/forward long position

‘stuff’ the broker and insist on a replacement name at the original price

accept a bank transfer compensation payment in favour of the bank or adjustment to brokerage bills

refuse any sort of compensation from the broker for the amount concerned

acknowledge the excuses of the broker and accept his offer of entertainment in compensation for the failed transaction

GBP 10,000.00

EUR 10,000.00

GBP 8,990.00

EUR 8,990.00

positive

changes only when interest rates levels are high

negative

changes only when interest rates levels are low

selling holdings of 30-year German Government bonds

replacing retail savings accounts with 3-month borrowings under repo

selling futures contracts on 30-year German Government bonds

placing a 20-year covered bond in the market

detail the rights of counterparties regarding the substitution of collateral

include named securities permitted to be traded

be bi-laterally signed by both dealers involved in any transaction

need not be in place before any deals are executed or finalized

Off-premises dealing should be strictly prohibited.

After-hours trading should be prohibited.

Deals transacted after normal business hours or off-premises should only be undertaken on mobile phones approved by management.

Deals transacted after normal business hours or off-premises either by mobile phones or any other equipment should only be undertaken with the approval of management.

Economic capital is calculated externally and is the amount of capital the firm should have to support its target credit rating

Economic capital is calculated on an expected shortfall basis with a specific time horizon and confidence level.

Economic capital is used for measuring and reporting risks across a financial organisation.

Economic capital is always lower than regulatory capital because of the more adequate modelling of correlation effects compared to the regulatory approach.

is a contract by which the maturity of a regular FX swap can be extended at an historic (noncurrent) rate

is a swap transaction where the near leg is traded either value today or value tomorrow and the far leg is traded spot

is a swap that does not start spot and where both the near and the far leg are traded forward

is a transaction by which a maturing outright forward FX is prolonged at an historic (non-current) rate

anywhere, even away from their own dealing premises

after-hours, but only if listed as such by management

after-hours, but only from their private residence

away from their broker’s dealing premises

14th December

15th December

16th December

17th December

The broker must show the borrower’s name to the lender first and disclose the lender’s name only if the borrower is acceptable to the lender.

The broker must show the lender’s name to the borrower first and disclose the borrower’s name only if the lender is acceptable to the borrower.

The broker must show the borrower’s and lender’s names to each other at the same time.

For marketing reasons, the broker can show the lender’s name to the borrower at any time.

A maturity analysis of a bank’s interest-bearing assets and interest-bearing liabilities.

A method used to measure how much each source of funding is contributing to overall profitability.

A calculation of the spread between the duration of the interest-bearing assets and the interestbearing liabilities.

The evaluation and management of the gap between a bank’s volume of loans and deposits.

Claims are not expected to be submitted after 15 days from the actual settlement date.

Claims of less than USD 5,000.00 are not expected to be submitted.

Claims are calculated on the full principal amount of the failed transaction. Interest rates are imposed by the agent banks, unless a higher negotiated rate is to be applied.

Acknowledgement of receipt of a claim should be confirmed within 48 hours by email or SWIFT.

only after consultation with the local regulator

only if the switching transaction is done at the current market rate

only provided that such transactions are identified as switching transactions

only after approval by the broker’s senior management

A short call option + short put option with a higher strike price than the call option

A long call option + long put option with a lower strike price than the call option

A short call option + short put option with a lower strike price than the call option

A long call option + short put option with higher strike price than the call option

Receives compensation if a reference interest rate falls below an agreed level

Pays compensation if a reference interest rate falls below an agreed level

Receives compensation if a reference interest rate rises above an agreed level

Pays compensation if a reference interest rate rises above an agreed level

Net interest income would increase slightly.

Net interest income would increase considerably.

Net interest income would decrease.

Net interest income would hardly change at all.

In their function as intermediaries, banks must necessarily accept some degree of interest rate risk.

Banks incur interest rate risk to increase income

Banks prefer c red it risk to market risk.

If banks failed to take on interest rate risk they would not be able to meet the needs of their deposit and loan customers.

A report describing operational risks, the most significant incidents and corrective plans of action should be established on a quarterly basis.

It is good practice to collect and analyze incidents and near-misses so as to set up preventive action plans for the future.

Every time a report describing operational risks is produced, it should be provided to senior management.

Whenever possible action plans should be put in place that mitigate operational risks that have been identified.

Costs more than an ‘in-the-money’ call option

Costs less than an ‘out-of-the-money’ call option

Costs more than an ‘out-of-the-money’ call option

Costs the same as an ‘in-the-money’ put option

Receives compensation if a reference interest rate falls below an agreed level

Pays compensation if a reference interest rate falls below an agreed level

Receives compensation if a reference interest rate rises above an agreed level

Pays compensation if a reference interest rate rises above an agreed level

FRA

Futures

No difference

Too little information to decide

to extend the contract to the next business day

to shorten the contract to the previous business day

The two parties involved agree to a new maturity date.

There is no standard market practice. ACIs Committee for Professionalism decides the issue on a case-by-case basis.

Today

Tomorrow

After you make an irrevocable payment

On the spot value date

The expected appreciation or depreciation of the base currency

The expected appreciation or depreciation of the quoted currency

Largely, the interest rate differential between two currencies

Solely, the interest rate differential between two currencies

open and effective communication channels between all levels of staff and cross-functions should be maintained.

regular internal audits should be carried out together with trading and risk management to ensure early identification of internal control weaknesses

complete segregation of duties between the front, middle and back office activities

a separate system for independent monitoring to ensure compliance with the risk management framework should be in place

In the case of short date deposits, if the borrower is not prepared to repay the deposit prior to notice of receipt of the funds from the correspondent bank.

The borrower has no lending line for the placer of the funds and does not wish to be embarrassed by being unable to reciprocate.

If he secures a better rate elsewhere.

The borrower would be in breach of internal or regulatory depositor concentration limitations.

The interest rates of the two currencies

The spot exchange rate

Thedaycount

Market expectation

0%

15%

20%

75%

claims of less than USD 100.00

claims of less than USD 1,000.00

claims of less than EUR 100.00

claims of less than EUR 1,000.00

Periodic exchange of fixed and floating payments up to and including maturity

At maturity by net payment

After maturity by exchange of fixed and floating payments

Two days after maturity by net payment