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ACI Operations Certificate challenging Questions and Answers

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:

Profit GBP 240,000.00

Loss GBP 240,000.00

Profit USD 240,000.00

Loss USD 240,000.00

Question 6

What do FX swap rates represent?

Options:

Largely the interest rate differential between two currencies

The price of an option

The expectation of an appreciation of a currency

The volatility of a currency

Question 7

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

Options:

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

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

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

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

Question 8

A non deliverable forward (NDF) is a:

Options:

Cash-settled currency forward between two counterparties

Exchange-traded, cash-settled currency forward

Over-the-counter, cash-settled spot FX

Principal-settled currency forward between two counterparties

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ACI Operations Certificate challenging Questions and Answers

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