ACI 3I0-012 Exam Questions Free Practice Test

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Viewing questions 151-165 out of questions

Questions # 151:

The delta of an at-the-money long call option is:

Options:

Between +0.5 and +1

+0.5

Between 0 and +0.5

Zero

Expert Solution

Questions # 152:

Are the forward points materially affected by changes in the spot rate?

Options:

never

Only for very large movements and longer terms

always

spot is the principal influence

Expert Solution

Questions # 153:

Under the Model Code, it a broker shouts “done” or “mine” at the very moment a dealer shouts “off”:

Options:

No deal is done.

The deal is done.

It should be resolved in consultation with senior management.

The central bank should be consulted.

Expert Solution

Questions # 154:

The market is quoting:

1-month (31-day) USD. 1.75%

3-month (91-day) USD. 2.05%

What is the 1x3 rate in USD?

Options:

4.261%

2.202%

1.900%

1.592%

Expert Solution

Questions # 155:

You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6-month LIBOR for the next payment date is fixed today at 4.95%. How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

Options:

buy a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

sell a strip of 0x6, 6x12, 12x18 and 18x24 FRAs

buy a strip of 6x12, 12x10 and 16x24 FRAs

sell a strip of 6x12, 12x18 and 18x24 FRAs

Expert Solution

Questions # 156:

In all dealing conversations, the Model Code strongly recommends:

Options:

Dealers stick to market terminology in order to avoid the impression that they are offering an advisory or fiduciary role.

Dealers clarity what is being proposed rather than using any terminology that could be misinterpreted.

Dealers restrict themselves to terminology listed and explained in Chapter 11 of the Model Code.

Dealers define complex terminology in the confirmation of a deal.

Expert Solution

Questions # 157:

A disgruntled customer claims that he should not have to settle an FRA with you because it is really just a wager. What type of risk are you exposed to?

Options:

Credit risk

Legal risk

Settlement risk

Basis risk

Expert Solution

Questions # 158:

What type of institution is the typical issuer of bank bills?

Options:

Credit institution

lnvestment bank

Corporate

All of the above

Expert Solution

Questions # 159:

You are quoted the following market rates:

spot EUR/CHF 1.1005

6M (180-day) EUR 3.45%

6M (180-day) CHF 1.25%

What are the 6-month EUR/CHF forward points?

Options:

+121

+120

-116

-119

Expert Solution

Questions # 160:

Today is Monday, 8th December. You sell a 9x12 FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?

Options:

8th September next year

10th September next year

8th December next year

10th December next year

Expert Solution

Questions # 161:

Your GBP/CHF rate is 1.3710-15. How many GBP would your customer have to give you to buy CHF 10,000,000.00?

Options:

7,291,286.91

7,293,946.02

13,710,000.00

13,715,000.00

Expert Solution

Questions # 162:

Which of the following currencies is quoted on an ACT/365 basis for the calculation of interest on interbank deposits in London?

Options:

EUR

JPY

HKD

AUD

Expert Solution

Questions # 163:

Which of the following statements is correct regarding duration?

Options:

It is a measure of the average price of a financial instrument.

It doesn’t take into account the timing and market value of cash flows.

It increases if the average coupon increases.

It decreases as maturity decreases

Expert Solution

Questions # 164:

Which one of the following statements about mark-to-model valuation is correct?

Options:

Mark-to-model valuation is used for exchange-traded positions to ensure correct pricing.

Asset managers are not allowed to use mark-to-model valuation.

Mark-to-model valuation is used for complex financial instruments; it is always accurate and in line with potential tradable prices.

Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.

Expert Solution

Questions # 165:

In a plain vanilla interest rate swap, the “fixed-rate payer”:

Options:

has established the price sensitivities of a longer-term fixed-rate liability and a floating-rate asset

has established the price sensitivities of a longer-term fixed-rate asset and a floating-rate liability

receives fixed in the swap

pays floating in the swap

Expert Solution

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