3I0-008 ACI DEALING CERTIFICATE

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Question 1

Click on the Exhibit Button to view the Formula Sheet. How much is a big figure worth per
million of base currency if EUR/GBP is 0.6990?

  • A. GBP 10,000
  • B. EUR 10,000
  • C. GBP 6,990
  • D. EUR 6,990


Answer : A

Question 2

Click on the Exhibit Button to view the Formula Sheet. What are the secondary market
proceeds of a CD with a face value of EUR 5 million and a coupon of 3% that was issued at
par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

  • A. EUR 4,997,085.03
  • B. EUR 5,000,000.00
  • C. EUR 5,071,086.45
  • D. EUR 5,072,874.16


Answer : D

Question 3

Click on the Exhibit Button to view the Formula Sheet. The one-month (31-day) GC repo
rate for French government bonds is quoted to you at 3.75-80%. As collateral, you are
offered EUR25 million nominal of the 5.5% OAT April 2006, which is worth EUR
28,137,500. If you impose an initial margin of 1%, the Repurchase Price is:

  • A. EUR 27,947,276.43
  • B. EUR 27,946,077.08
  • C. EUR 27,950,071.43
  • D. EUR 27,948,871.97


Answer : D

Question 4

Click on the Exhibit Button to view the Formula Sheet. Fraud is typically classified as:

  • A. Credit risk
  • B. Market risk
  • C. Legal risk
  • D. Operational risk


Answer : D

Question 5

Click on the Exhibit Button to view the Formula Sheet. You are quoting forward FX prices to
a broker subject to finding a counterparty for a matching transaction. The Model Code
says:

  • A. You must tell the broker, who must qualify your quotes.
  • B. For credit reasons, you must tell the broker when he presents a name.
  • C. You cannot do this.
  • D. The Model Code does not make recommendations on this subject.


Answer : A

Question 6

Click on the Exhibit Button to view the Formula Sheet. Which of following is not true?

  • 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.


Answer : B

Question 7

Click on the Exhibit Button to view the Formula Sheet.
How many USD would you have to invest at 3.5% to be repaid USD125 million (principal
plus interest) in 30 days?







  • A. USD 124,641,442.43
  • B. USD 124,636,476.94
  • C. USD 124,635,416.67
  • D. USD 123,915,737.30


Answer : B

Question 8

Click on the Exhibit Button to view the Formula Sheet. If spot GBP/CHF is quoted 2.3875-
80 and the 3-month forward outright is 2.3660-70, what are the forward points?

  • A. 21.5/21
  • B. 210/215
  • C. 215/210
  • D. 21/21.5


Answer : C

Question 9

Click on the Exhibit Button to view the Formula Sheet. It is June. You are over-borrowed
from October to January on your deposit book. How would you hedge using FRAs?

  • A. Sell 3x6
  • B. Buy 3x6
  • C. Sell 4x7
  • D. Buy 4x7


Answer : C

Question 10

Click on the Exhibit Button to view the Formula Sheet. Confirmations must be sent out:

  • 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.


Answer : B

Question 11

Click on the Exhibit Button to view the Formula Sheet. If 6-month EUR/AUD is quoted at
29/32, which of the following statements is correct?

  • A. EUR rates are higher than AUD rates in the 6-month
  • B. AUD rates are higher than EUR rates in the 6-month
  • C. There is a positive EUR yield curve
  • D. There is not enough information to decide


Answer : B

Question 12

Click on the Exhibit Button to view the Formula Sheet. The theta of an option is:

  • A. The sensitivity of the option value to changes in interest rates
  • B. The sensitivity of the option value to changes in volatility
  • C. The sensitivity of the option value to changes in the time to expiry
  • D. The sensitivity of the option value to changes in the price of the underlying


Answer : C

Question 13

Click on the Exhibit Button to view the Formula Sheet. What is the incentive for market-
making?

  • A. Bid/offer spread
  • B. Flow information
  • C. Relationships
  • D. All of the above


Answer : D

Question 14

Click on the Exhibit Button to view the Formula Sheet. The mid-rate for USD/CHF is 1.3950
and the mid-rate for AUD/USD is 0.7060. What is the mid-rate for CHF/AUD?

  • A. 0.9849
  • B. 1.0154
  • C. 1.9759
  • D. 0.5061


Answer : A

Question 15

Click on the Exhibit Button to view the Formula Sheet. What is the probability of an at-the-
money option being exercised?

  • A. Less than 50% probability
  • B. 50% probability
  • C. More than 50% probability
  • D. Zero probability


Answer : B

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