3I0-013 ACI Operations Certificate challenging

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Question 1

Which of the following best describes TARGET2?

  • A. The real-time gross settlement (RTGS) system owned and operated by the Eurosystem
  • B. The system used in Germany for settling high value domestic securities transactions
  • C. The pan-Europe netting system used for reducing credit risk for derivative transactions
  • D. The system used by the European Banking Federation to clear cross border Euro payments

Answer : A

Question 2

What is a settlement date?

  • 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

Answer : C

Question 3

What is the main difference between TARGET and TARGET2?

  • A. Finland did not participate in TARGET but it does participate in TARGET2
  • B. The cut-off time for TARGET2 is 20:00 (8.00 p.m.) CET, whereas the cut-off time for TARGET was 18:00 (6.00 p.m.) CET
  • C. TARGET2 runs on a single shared technical platform whereas TARGET did not
  • D. TARGET2 processes payment orders denominated in EUR as well as USD

Answer : C

Question 4

Which of the following best describes the main benefit of the RTGS payment system?

  • A. Final settlement of interbank funds transfers on a continuous, trade by trade basis throughout the day
  • B. Lower costs through fewer payments passing through nostro accounts
  • C. Lower costs through less labor intensive methods
  • D. Reduced market risk due to smaller values of open positions

Answer : A

Question 5

A payment is made from Germany to a second Euro zone country. Which international
payment system would normally be used?

  • A. TARGET2
  • B. Euro Link System (ELS)
  • C. Euroclear
  • D. Clearstream

Answer : A

Question 6

What are the principal functionalities of interbank funds transfer systems?

  • A. The matching of confirmations
  • B. The dealing and archiving of payment orders
  • C. Reconciliation and correspondent banking
  • D. The transfer of information and settlement

Answer : D

Question 7

Which of the following currencies is eligible for CLS settlement?

  • A. ZAR
  • B. TRY
  • C. MYR
  • D. CNY

Answer : A

Question 8

A message received and accepted by SWIFT will be acknowledged with:

  • A. OK
  • B. ACK
  • C. MAK
  • D. NAK

Answer : B

Question 9

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

  • A. The close-out process
  • B. The customer matching process
  • C. The settlement process
  • D. The securities lending process

Answer : C

Question 10

CHIPS is the name commonly used for the domestic clearing system in:

  • A. London
  • B. Frankfurt
  • C. New York
  • D. Hong Kong

Answer : C

Question 11

You have five outstanding amounts with five different values. Which of the following should
be investigated first?

  • A. The most recently processed deal
  • B. The counterparties in your own country
  • C. The counterparty which claims first
  • D. Those positions with the highest loss potential

Answer : D

Question 12

What is the primary role of the position-keeper in a dealing room?

  • A. To keep the multilateral limits updated
  • B. To invest funds at the highest available interest rate
  • C. To keep the balance or position of the accounts or nostros in each currency representing the accounts held by the banks agents
  • D. To keep the management informed about interest rate developments

Answer : C

Question 13

What is an essential feature of nostro reconciliations?

  • 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

Answer : C

Question 14

You have two nostro accounts in USD, one account is long USD 5,000,000.00 and the
other is short USD 5,000,000.00. What action should be taken to reconcile the accounts?

  • A. No action is required. The credit interest earned on the credit balance will offset the debit interest incurred on the short balance
  • B. You should borrow USD 5,000,000.00 to cover the short balance and leave the long balance as it is
  • C. You should lend the surplus USD 5,000,000.00 in order to compensate the overdraft charges on the short balance with the interest earned on the loan
  • D. You should instruct the bank with the long balance to transfer USD 5,000,000.00 to your nostro account at the other bank

Answer : D

Question 15

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

  • 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)

Answer : B

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