ACI Dealing Certificate (3I0-012) Free Practice Test

Question 1

What does the Model Code recommend regarding the practice of "name switching/substitution"?

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

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

C. 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.

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

Correct Answer: C

Question 2

Bank participants have a duty to make it clear that their prices are firm or merely indicative:

A. At all times.

B. Only if the amount is not marketable.

C. Only if they are dealing with brokers.

D. Only if they are dealing in a fast moving market.

Correct Answer: A

Question 3

The delta of an option is:

A. The sensitivity of the option value to changes in the time to expiry

B. The sensitivity of the option value to changes in the price of the underlying

C. The sensitivily of the option value to changes in interest rates

D. The sensitivity of the option value to changes in volatility

Correct Answer: B

Question 4

What is the Gold Offered Forward Rate (GOFO)?

A. the price differential between spot and forward gold prices

B. the price of gold for forward delivery

C. the rate at which dealers will lend gold against US dollars

D. the implied forward price of gold

Correct Answer: C

Question 5

Under which circumstances are banks allowed to park positions with a counterparty?:

A. It is forbidden to park positions.

B. If approved by senior management.

C. If the two counterparties agree.

D. In conditions of exceptional volatility.

Correct Answer: A

Question 6

You hear from several counterparties that a major market participant has taken major losses on long USD/JPY positions. You know the reports are untrue, as you have in fact bought large amounts of USD/JPY from that very firm, which means that the impact of the reports on the market would be helpful to your position.

A. You should contradict the reports.

B. As you have heard the reports from other parties, you are entitled to pass them on to other market participants.

C. You should not pass any information you know to be false.

D. As you have heard the reports from other parties, you are entitled to pass them on to market news services.

Correct Answer: C

Question 7

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?

A. EUR 1,561.11

B. EUR 2,255.56

C. EUR 2,951.39

D. EUR 1,388,89

Correct Answer: A

Question 8

What is a master agreement intended to do?

A. Set out the rights and obligations of two parties

B. All of the above

C. Describe the parameters of a dealing relationship

D. Apply to all transactions between two parties

Correct Answer: B

Question 9

Brokers shall not reveal the identity of a counterparty unless:

A. They are forced to do so.

B. They know the counterparty very well.

C. They are asked by their senior management to do so.

D. Explicitly authorised to do so by the counterparty.

Correct Answer: D

Question 10

VaR increases with:

A. a shorter time horizon

B. lower correlation of underlying risk factors

C. a higher confidence level

D. a lower confidence level

Correct Answer: D

Question 11

What steps will the CFP of the ACI probably not undertake after having been formally notified by one of the parties of a breach of the letter or spirit of the Model Code?

A. bring the matter to the appropriate court of justice

B. bring the matter to the attention of the appropriate regulatory body

C. consult the local ACI national association

D. examine the complaint

Correct Answer: A

Question 12

What is the maximum maturity of an unsecured USCP?

A. 270 days

B. 5 years

C. 183 days

D. One year

Correct Answer: A

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ACI Dealing Certificate (3I0-012) Free Practice Test