ACI 3I0-012 Exam Questions Free Practice Test

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Questions # 91:

Bank XYZ calls you for a quote in EUR/USD for EUR 50,000,000.00. If you decide to quote, which of the following is true?

Options:

You must be prepared to deal EUR 50,000,000.00.

You may quote without stating the amount you are prepared to deal.

You are only committed to deal in a marketable amount.

You must be prepared to deal for more than EUR 50,000,000.00 in case Bank XYZ wishes to.

Expert Solution

Questions # 92:

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

Options:

Less than 50% probability

50% probability

More than 50% probability

Zero probability

Expert Solution

Questions # 93:

Today’s spot value date is the 29th of February. What is the maturity date of a 4-month USD deposit deal today? Assume no bank holidays.

Options:

Thursday 27th June

Friday 28th June

Saturday 29th June

Monday 1st July

Expert Solution

Questions # 94:

What is the ISO code for the Argentine peso?

Options:

ARP

ARS

ARA

AED

Expert Solution

Questions # 95:

If the duration gap is zero, how will a small parallel shift in interest rates affect the market value of the bank’s equity?

Options:

If interest rates rise, the market value of equity will increase

If interest rates rise, the market value of equity will decrease C. The bank is immunised from changes in interest rates.

The market value of equity will decrease due to an increase in interest rates

Expert Solution

Questions # 96:

The spot/next repo rate for the 5% Bund 2018 is quoted to you at 1.75-80%. You sell bonds with a market value of EUR 5,798,692.00 through a sell/buy-back. The Repurchase Price is:

Options:

EUR 5,798,982

EUR 5,799,497

EUR 5,746,376

EUR 5,000,694

Expert Solution

Questions # 97:

A 7% CD was issued at par, which you now purchase at 6.75%. You would expect to pay:

Options:

The face value of the CD

More than the face value

Less than the face value

Too little information to decide

Expert Solution

Questions # 98:

Which of the following methods is a means of credit risk mitigation?

Options:

entering into a plain vanilla IRS

entering into collateral agreements

hedging a portfolio’s USD exposure

investing only in sizeable and liquid markets

Expert Solution

Questions # 99:

What is EONIA?

Options:

Volume-weighted average overnight EUR deposit rate

Volume-weighted average overnight EUR LIBOR

Arithmetic average overnight EUR deposit rate

ECB overnight lending rate

Expert Solution

Questions # 100:

What happens when a coupon is paid on bond collateral during the term of a classic repo?

Options:

Nothing

A margin call is triggered on the seller

A manufactured payment is made to the seller

Equivalent value plus reinvestment income is deducted from the repurchase price

Expert Solution

Questions # 101:

The seller of a put option has:

Options:

Substantial opportunity for gain and limited risk of loss

Substantial risk of loss and substantial opportunity for gain

Limited risk of loss and limited opportunity for gain

Substantial risk of loss and limited opportunity for gain

Expert Solution

Questions # 102:

An ‘at-the-money’ option has:

Options:

Intrinsic value but no time value

Time value but no intrinsic value

Both time value and intrinsic value

Neither time value nor intrinsic value

Expert Solution

Questions # 103:

Supervisors would generally consider interest rate risk exposure in the banking book excessive beginning at what level of losses given a +1- 200 bps market rate movement?

Options:

> 2% of 6 months forward earnings

> 20% of regulatory capital

<10% of regulatory capital

< 5% of 12 months forward earnings

Expert Solution

Questions # 104:

Hybex Electrics is a highly rated company with a considerable amount of fixed rate liabilities and would like to increase the percentage of floating rate debt. Which of the following is the best course of action?

Options:

Hybex should become a payer of a fixed rate on a swap against receipt of LIBOR.

Hybex should become a receiver of a floating rate on a swap against payment of a fixed rate

Hybex should become a receiver of a fixed rate on a swap against payment of LIBOR D.

Hybex should become a receiver of a floating rate on a swap against payment of LIBOR

Expert Solution

Questions # 105:

Which of the following scenarios offer an example of wrong way risk?

Options:

A bank purchases credit protection on highly-rated tranches of US mortgage-backed securities from a US mortgage bank

A bank sells protection on the iTraxx main index at a level of 25 bps and shortly afterwards the index crosses the 200 bps level

A bank sells EUR put I USD call ATM options with an expiry date of 6 months and afterwards volatility moves up to substantially higher levels

A bank enters into a receiver’s swap while interest rates are increasing

Expert Solution

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