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Questions # 1:

Which type of repo is the least risky for the buyer?

Options:

A.

Delivery repo

B.

HlC repo

C.

Tri-party repo

D.

There is no real difference

Expert Solution
Questions # 2:

You have made a price by a Japanese bank in (SD 2,000,000.00 against JPY. They made you

98.95-03 and you took the offer. USD/JPY is now quoted 98.78-81 and you square your position.

What is your profit or loss?

Options:

A.

Profit of JPY 340.000

B.

Profit of JPY 1.500,000

C.

Loss of JPY 340.000

D.

LossofJPV 500.000

Expert Solution
Questions # 3:

Under Basel rules, what is the meaning of IRB?

Options:

A.

Internal Risk Based

B.

Internal Ratings Based

C.

Intrinsic Risk Based

D.

Internal Rule Based

Expert Solution
Questions # 4:

Which of the following definitions of a nostro account is correct?

Options:

A.

A nostro account is an account held by a bank in a foreign country in the banks domestic currency.

B.

A nostro account is an account held by a bank in a foreign country for cash collateralising OTC derivative positions with banks in that country.

C.

A nostro account is an account held by a bank in a foreign country in the currency of that country.

D.

A nostro account is an account held by a bank in its home country in a foreign currency.

Expert Solution
Questions # 5:

What is the maximum maturity of a London CD?

Options:

A.

One year

B.

270 days

C.

183 days

D.

5years

Expert Solution
Questions # 6:

What is the principal risk identified by gap management reporting?

Options:

A.

Currency risk

B.

Interest rate risk

C.

Operational risk

D.

Credit risk

Expert Solution
Questions # 7:

Confirmations must be sent out

Options:

A.

Immediately after the deal is done.

B.

As quickly as possible after the deal is done.

C.

By electronic media only, e.g. fax, telex.

D.

Not later than the value date of the first leg of the transaction.

Expert Solution
Questions # 8:

You have just sold USD 5,000,000.00 spot against JPY. What type of risk does not apply?

Options:

A.

Market risk

B.

Settlement risk

C.

Basis risk

D.

Credit risk

Expert Solution
Questions # 9:

What is the probability of an at-the-money option being exercised?

Options:

A.

Less than 50% probability

B.

50% probability

C.

More than 50% probability

D.

Zero probability

Expert Solution
Questions # 10:

If the daily 90% confidence level VaR of a portfolio is correctly estimated to be USD 5,000.00, one would expect that:

Options:

A.

in 1 out of 10 days, the portfolio value will decline by USD 5,000.00 or less.

B.

in 1 out of 90 days, the portfolio value will decline by USD 5,000.00 or less.

C.

in 1 out of 10 days, the portfolio value will decline by USD 5,000.00 or more.

D.

in 1 out of 90 days, the portfolio value will decline by USD 5,000.00 or more.

Expert Solution
Questions # 11:

Which of following is not true?

Options:

A.

Inter-bank market participants have a duty to make absolutely clear whether the prices they are quoting are firm or merely indicative.

B.

It is the duty of the dealer to periodically confirm with the broker the validity of his price.

C.

It is the responsibility of the dealer to ensure that prices given to a broker are taken off if they have not been hit or were subject to a time limit.

D.

No deal is done if one counterparty is unable to conclude a deal due to credit line problems and a name switch is not found within a reasonable period of time.

Expert Solution
Questions # 12:

A payer’s 3-month USD LIBOR swap with a remaining term of five years must be reported as:

Options:

A.

a five-year liability and a three-month asset

B.

a five-year asset and a three-month liability

C.

a five-year asset only

D.

a three-month liability only

Expert Solution
Questions # 13:

When an employee executes a personal trade in advance of a client’s or institution’s order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

Options:

A.

front running

B.

ex ante trading

C.

insider dealing

D.

forward-facing

Expert Solution
Questions # 14:

What is an FX swap?

Options:

A.

An exchange ot two streams of interest payments in different currencies and an exchange of the principal amounts of those currencies at maturity

B.

A spot sale (purchase) and a forward purchase (sale) of two currencies agreed simultaneously between two parties

C.

An exchange of currencies on a date beyond spot and at a price fixed today

D.

None of the above

Expert Solution
Questions # 15:

ACI’s Committee for Professionalism will offer expert opinion in disputes between firms if:

Options:

A.

both parties to the dispute are members of the ACI and agree to submit the dispute to the ACI

B.

one of the counterparties requests the assistance of ACI’s Committee for Professionalism

C.

the two counterparties are located in different financial centers

D.

the amount in dispute is more than USD 100,000.00 or equivalent

Expert Solution
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