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ACI 3I0-013 Dumps

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Total 386 questions

ACI Operations Certificate challenging Questions and Answers

Question 1

Some large losses occurred in the past from derivatives trading because:

Options:

A.

Derivatives brokers significantly over-charged their clients

B.

Institutions did not understand the leverage of their transactions

C.

Money managers engaged in intra-day trading

D.

Money managers embezzled money using derivatives

Question 2

What risks arise from not receiving the securities purchased or not receiving payment for securities sold?

Options:

A.

Liquidity, market and counterparty risk

B.

Only a funding risk

C.

Only a liquidity and a funding risk

D.

Settlement, funding and liquidity risk

Question 3

The price of a zero coupon, maturing in 2 years, is

Options:

A.

Always close to 100%

B.

Above 100%

C.

Below 100%

D.

Always precisely 100%

Question 4

Which interest convention is used in the bond market for GBP?

Options:

A.

ACT/360

B.

ACT/ACT

C.

360/360

D.

ACT/365

Question 5

In error, your dealer enters a trade whereby he buys GBP 8,000,000.00 against USD at 1.5500, but manages to cover it at the same rate. When the initial mistaken trade is cancelled, however, the rate has since changed to 1.5200. What is the effect on P&L?

Options:

A.

Profit GBP 240,000.00

B.

Loss GBP 240,000.00

C.

Profit USD 240,000.00

D.

Loss USD 240,000.00

Question 6

What do FX swap rates represent?

Options:

A.

Largely the interest rate differential between two currencies

B.

The price of an option

C.

The expectation of an appreciation of a currency

D.

The volatility of a currency

Question 7

Which of the following statements concerning "account reconciliations" is incorrect?

Options:

A.

Account reconciliations are necessary for the early detection of missing, failed or erroneous entries.

B.

Custody accounts should be reconciled after each account movement or at least once a month.

C.

Reconciliations related to transactions and balances should only be conducted for cash accounts.

D.

Cash accounts should be reconciled as soon as an updated account statement is available.

Question 8

A non deliverable forward (NDF) is a:

Options:

A.

Cash-settled currency forward between two counterparties

B.

Exchange-traded, cash-settled currency forward

C.

Over-the-counter, cash-settled spot FX

D.

Principal-settled currency forward between two counterparties

Question 9

A dealer makes the following deals in EUR/USD:

Sells EUR 1,500,000.00 at 1.3560

Buys EUR 3,250,000.00 at 1.3542

Sells USD 2,709,600.00 at 1.3548

Buys USD 1,762,410.00 at 1.3557

What is the dealer's position as a result of these trades?

Options:

A.

Short EUR 2,450,000.00 at 1.3528

B.

Long EUR 2,450,000.00 at 1.3528

C.

Long EUR 2,000,000.00 at 1.3532

D.

Long EUR 2,450,000.00 at 1.3525

Question 10

If today's spot date were Monday, 1 March, what would be the maturity of a 1-month CHF interbank deposit, assuming that there are no intervening bank holidays?

Options:

A.

Tuesday, 30 March

B.

Wednesday, 31 March

C.

Thursday, 1 April

D.

Friday, 2 April

Question 11

The effective Euro overnight reference rate, computed as a weighted average of ail overnight unsecured lending transactions undertaken in the interbank market and computed with the help of the European Central Bank, is called:

Options:

A.

EURIBOR

B.

SONIA

C.

EONIA

D.

EURONIA

Question 12

A UK Treasury Bill has 91 days to maturity. Its redemption value is GBP 100,000.00, What is the purchase price of this bill using a discount rate of 1,25% per annum?

Options:

A.

GBP 98,750.00

B.

GBP 100,000.00

C.

GBP 99,688.36

D.

GBP 99,684.03

Question 13

You request use of funds from your agent bank for 1 day on an amount of EUR 100,000,000.00, EONIA was 0.812% and the ECB deposit facility rate is 0.50%. What use of funds settlement amount should you expect?

Options:

A.

EUR 1,388.89

B.

EUR 1,561.11

C.

EUR 2,255.56

D.

EUR 2,951.39

Question 14

If Bank A sells securities to Bank B, and at the same time and as part of the same transaction, commits to repurchase equivalent securities on a specified future date, Bank A has dealt:

Options:

A.

An asset swap

B.

A CFD (contract for difference)

C.

A repo

D.

A securities lending

Question 15

What does "arrange good value payment" mean?

Options:

A.

To cancel an initial payment order and to process a new one with a higher amount

B.

To suspend a payment order until the balance becomes positive again

C.

To adjust the amount of fees to be paid

D.

To change the value date of a payment order

Question 16

Loan/deposit input and mismatch analysis capability belongs to which module in a treasury system?

Options:

A.

The FX spot and forward dealing input and processing module

B.

Standard back office features

C.

The money market dealing and processing module

D.

The securities trading and processing module

Question 17

The CLS-Bank (Continuous Linked Settlement) is one of the ways through which FX transactions can be settled. Why was this bank founded?

Options:

A.

To simplify domestic payments

B.

To handle interbank liquidity more efficiently

C.

To accelerate cross-border payments

D.

To minimize settlement risks

Question 18

In FX swaps, the rate of the spot leg:

Options:

A.

May be freely chosen by the quoting party as long as both parties agree on it

B.

Must always be fixed immediately at the current mid rate, to reflect the rate at the time the deal was made

C.

Should be fixed immediately within the current spread, to reflect current rates at the time the transaction was made

D.

Should always be fixed off the current spread in order not to be mistaken for a spot FX transaction

Question 19

You are in the pub with a friend who works for another financial institution. The friend asks you for information about a mutual customer's forward foreign exchange dealing volumes. What should you do?

Options:

A.

Tell him all you know

B.

Tell him nothing

C.

Give him some of the information because the deal involves a mutual customer

D.

Tell him you will investigate and get back to him with the information

Question 20

Why is securities reconciliation necessary?

Options:

A.

To prevent that a failed order results in a failure to settle that day, which in turn would lead to an incompletely-reconciled account.

B.

To facilitate the handling of complex security transactions.

C.

In order to save data capacity in electronic archiving systems.

D.

To anticipate the fact that clearing houses stop processing in the afternoon, whereas payment orders may still be processed until 6 p.m.

Question 21

What is the RTGS single technical platform inter-linking the ECB and the national central banks of the EU member states which have adopted the Euro?

Options:

A.

CHAPS

B.

TARGET 2

C.

EAF

D.

FX-NET

Question 22

If a bank incurs interest charges from having overdrawn an account due to a late payment from a counterparty:

Options:

A.

The bank is entitled to seek reimbursement from the party responsible for the late payment.

B.

Nothing can be done to compensate the bank for the interest charges it incurs.

C.

The bank should file a complaint with ACI’s Committee for Professionalism.

D.

The bank will automatically be reimbursed by the party responsible for the late payment.

Question 23

Due to an error by your dealers, your bank is 5 days late in paying EUR 10,000,000.00. Your correspondent bank says it will charge you 6% p.a. plus reserve costs of EUR 1.00 per thousand. How much will your account be charged for this overdraft?

Options:

A.

EUR 8,219.18

B.

EUR 8,333.33

C.

EUR 18,219.18

D.

EUR 18,333.33

Question 24

If the maturity of a straight 3-month deposit fails on a Saturday, which is also the last day of the month, what will be the final end date of this transaction?

Options:

A.

The following Monday

B.

Saturday

C.

The last business day of the month

D.

The first business day of the following month

Question 25

What is a loro or vostro bank account?

Options:

A.

An account that you hold with another commercial bank

B.

An account that another bank holds with you

C.

An account that you hold with the Bank of England

D.

Your suspense account at the European Central Bank

Question 26

A "basis point", expressed as a percentage, is:

Options:

A.

1%

B.

0.01%

C.

0.1%

D.

0.0001%

Question 27

As to deal confirmations, who is your counterparty on futures contracts?

Options:

A.

The futures exchange itself

B.

The clearing house of the futures exchange

C.

Your broker

D.

The ISDA

Question 28

Under normal circumstances, which of the following is a non-negotiable instrument?

Options:

A.

A Medium Term Note

B.

A Banker’s Acceptance

C.

A Money Market Deposit

D.

A Treasury Bill

Question 29

Which one of the following statements about claims is true?

Options:

A.

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

B.

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

C.

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.

D.

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

Question 30

What guidelines does the Model Code provide concerning the practice in the interbank market of only one party to a transaction sending a written confirmation?

Options:

A.

It is only permissible in derivatives markets

B.

Both parties of a trade should send confirmations

C.

It is recommended

D.

It is only permissible when dealing value today

Question 31

As to futures contracts:

Options:

A.

The maintenance margin is a predetermined fraction of initial margin

B.

The initial margin is a predetermined fraction of maintenance margin

C.

The maintenance margin represents the brokerage costs

D.

The maintenance margin represents management fees

Question 32

Which one of the following statements regarding the segregation of duties in the confirmation process is incorrect?

Options:

A.

Front office staff should not be able to modify confirmations.

B.

The staff who confirm trades should be distinct from those who agree to and execute trades.

C.

The process of confirming trades should be done only by Operations staff.

D.

Only staff who agree to and execute trades should be permitted to modify any details of the written confirmation.

Question 33

If the back office staff receive a trade that is incomplete, which information is absolutely essential for processing the trade?

Options:

A.

The clearing house phone number

B.

The account number to which fees are booked

C.

The identity of the counterparty’s dealer

D.

The name of the counterparty

Question 34

Which interest rates are used to calculate the exchange rate of an outright transaction value tomorrow (over tom)?

Options:

A.

The overnight interest rates of both currencies

B.

The spot next interest rates of both currencies

C.

The one week interest rates of both currencies

D.

The torn next interest rates of both currencies

Question 35

Which of the following is a fundamental element or module in the “securities dealing and processing” part of a treasury system?

Options:

A.

The financial reporting standard

B.

Brokerage accounting

C.

The custodian account reconciliation function

D.

The country limit overview

Question 36

A USD 1,0000,000.00 US Treasury Bill (91 days) is offered at a discount rate of 0.75%. The offer price will be:

Options:

A.

USD 1,000,000.00

B.

USD 998,104.17

C.

USD 992,500.00

D.

USD 998,130.14

Question 37

Which of the following currencies is eligible for CLS settlement?

Options:

A.

ZAR

B.

TRY

C.

MYR

D.

CNY

Question 38

Which of the following processes are offered by the CLS settlement system?

Options:

A.

The close-out process

B.

The customer matching process

C.

The settlement process

D.

The securities lending process

Question 39

Why are confirmations necessary?

Options:

A.

Confirmations authenticate the transaction to the risk manager, as well as providing essential information regarding bilateral limits.

B.

in order to authenticate the BIC-code of the counterparty when the confirmation is sent via SWIFT.

C.

in order to have the exact mailing address of the counterparty when the confirmation is sent via mail.

D.

Confirmations authenticate transactions to staff independent of the dealing room, as well as providing essential information regarding settlement.

Question 40

What is an essential feature of nostro reconciliations?

Options:

A.

That a daily nostro reconciliation report is sent out to the correspondent bank

B.

That they are performed before the next business day

C.

That they are performed in a timely and efficient way

D.

That open items are booked on an internal account

Question 41

You take a EUR deposit on Monday, 13 February. Assuming there are no intervening bank holidays, what is the one-month maturity date?

Options:

A.

Monday, 13 March

B.

Tuesday, 14 March

C.

Wednesday, 15 March

D.

Thursday, 16 March

Question 42

Which of these statements is correct?

Options:

A.

The strike price of a Bermudan option is an average.

B.

A Bermudan option can be exercised only on a few specific dates prior to expiration.

C.

A Bermudan option can be exercised at any time before its maturity date.

D.

A Bermudan option can be exercised only at maturity.

Question 43

What is a settlement date?

Options:

A.

The date by which the interest payment on an operation must be made

B.

The last date by which the minimum reserve amount can be paid to the central bank

C.

The date, on which settlement must be made on the contracted amount or the differential amount of an operation

D.

The date a deal is processed

Question 44

Most non deliverable forwards (NDFs) are cash-settled in:

Options:

A.

GBP

B.

USD

C.

CHF

D.

EUR

Question 45

Which kind of report is a reconciliation system unable to produce?

Options:

A.

A “probable matched items report” (a report in which most fields match but there are some discrepancies)

B.

A “calculated fees report” (a report of the expected fees owed)

C.

A “matched items report” (a report of all fields that match)

D.

An “unmatched items report” (a report of items for which one is unable to find matches)

Question 46

What documents and/or information should you hold in order to start an investigation?

Options:

A.

From the counterparty: the trade confirmation, In-house: the trade confirmation, nostro reconciliation details, the dealing ticket and eventually dealing-system conversation printout

B.

From the counterparty: the dealers name and phone number. In-house: dealer's name as well as the exact time the deal was processed

C.

From the counterparty: the trade confirmation, In-house: the open item list, nostro reconciliation details and the dealing ticket

D.

From counterparty: the balance report and the trade confirmation; In-house: the dealing-system conversation printout

Question 47

The "value date" is best described as:

Options:

A.

The date a trade is undertaken

B.

The date the fixing rate is agreed upon

C.

The date the settlement occurs

D.

The date confirmations are exchanged between counterparties

Question 48

A large corporate client sends you a case of expensive wine as a reward for settling a compensation case in their favor. What should you do?

Options:

A.

You should decline the gift.

B.

You should share the gift amongst your back office colleagues.

C.

You should report the gift to management and leave it to the management's discretion as to whether you are allowed to keep the gift.

D.

You should accept the gift without question as it was personally addressed to you.

Question 49

When should discrepancies between front-office and back-office systems be resolved?

Options:

A.

By the end of the trading day

B.

On the next business day

C.

On the value date

D.

As soon as they become apparent

Question 50

The owner of a convertible bond:

Options:

A.

Has the obligation to convert his bond

B.

Has the right to convert his bond

C.

Must wait for the decision of the issuer if he wants to convert his bond

D.

Has the obligation to convert the coupon into a variable or a fixed rate

Question 51

Which of the following trades involves replacement risk?

Options:

A.

The purchase of shares through Eurex Clearing (payment against delivery)

B.

The purchase of an OTC call option

C.

The taking of call money

D.

A long position in Bund futures

Question 52

For the third time in a month, a back office clerk has been questioned by one of his spot FX dealers about back office payment authorization and confirmation procedures. What should he/she do?

Options:

A.

He/she should report this to his/her supervisor

B.

He/she should respond to the questions

C.

He/she should avoid the dealer

D.

He/she should refuse to answer the questions

Question 53

If a trade is to settle in a CCP or CLS:

Options:

A.

The parties may agree verbally not to exchange confirmations

B.

A party can unilaterally eliminate confirmations for these trades

C.

It is left to the discretion of each party to send a confirmation or not

D.

The parties may agree in writing not to exchange confirmations

Question 54

In settlement, which "know your trade" best practice is incorrect?

Options:

A.

Each transaction should be processed always in advance of the payment cut-off time.

B.

Know the status of your trade.

C.

Prioritize trade settlement considering payment cut off times including currency sensitivity and size of amount.

D.

A trade booked in the front office should be available to the cash management department no later than the close of trading day for nostro account management.

Question 55

You request use of funds from your agent bank for 2 days on an amount of EUR 25,000,000.00. EONIA is 0.790% on the first day and 0.836% on the second day. The ECB deposit facility rate is 0.75% on both days. What use of funds settlement amount should you expect?

Options:

A.

EUR 694.44

B.

EUR 781.94

C.

EUR 1,041.67

D.

EUR 1,129.17

Question 56

Which of the following is the primary responsibility of an Operations Department?

Options:

A.

Writing the deal ticket

B.

Arranging the delivery of currency payments

C.

Checking the availability of counterparty limits

D.

Agreeing on the FX rate with the counterparty's middle office

Question 57

Where is the bank with the BIC-address "BOJPJPJT" located?

Options:

A.

Jamaica

B.

Jordan

C.

Bosnia

D.

Japan

Page: 1 / 14
Total 386 questions