3I0-008 Online Practice Questions and Answers

Click on the Detail Button to view the Formula Sheet. What is the Gold Offered Forward Rate?

A. The price differential between spot and forward gold prices

B. The rate at which dealers will lend gold against US dollars

C. The implied forward price of gold

D. The price of gold for forward delivery

Click on the Detail Button to view the Formula Sheet. Which of the following statements is correct?

A. An adjusted settlement amount is paid at the end of the FRA contract period that includes reinvestment interest for late payment

B. An unadjusted settlement amount is paid at the end of the FRA contract period

C. An adjusted settlement amount is paid at the start of the FRA contract period that is discounted for early payment

D. An unadjusted settlement amount is paid at the start of the FRA contract period

Click on the Detail Button to view the Formula Sheet. You deal over the phone with a counterparty. The subsequent confirmation differs from the terms agreed verbally. What is the result?

A. The confirmation takes precedence as it is a written contract.

B. The matter will have to be submitted to arbitration in order to establish the mutual intent of the parties.

C. It depends on local law.

D. The verbal agreement is binding.

Click on the Detail Button to view the Formula Sheet. It is now permissible in most markets for brokers to be owned by banks and other principals. Where there is shared management, or a shareholding or other investment in a broker by a counterparty:

A. The broker is not obligated to reveal the connection provided Chinese Walls are in place.

B. The broker is not obligated to reveal the connection in the professional market.

C. The broker should advise the other counterparty of the connection.

D. The matter is covered in the Model Code.

Click on the Detail Button to view the Formula Sheet. If GBP/USD is quoted to you at 1.6120-30, how much GBP would you receive if you sold USD 2,000,000 ?

A. 1,239,925.60

B. 1,237,873.80

C. 1,240,694.79

D. 1,242,720.50

Click on the Detail Button to view the Formula Sheet. A customer based in the UK exports automotive parts to the US. His main competitor is in France? What type of exposure to currency risk is posed by movements in EUR/USD?

A. Transaction exposure

B. Translation exposure

C. Economic exposure

D. None

Click on the Detail 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.

Click on the Detail Button to view the Formula Sheet. The Chairman and members of the ACIs Committee for Professionalism are ready to assist in resolving disputes through the ACIs Expert Determination Service in situations where:

A. The amount of the deal exceeds EUR 5 million.

B. The local regulator or central bank declines to intervene.

C. Litigation has already commenced.

D. At the request of one of the counterparties.

Click on the Detail Button to view the Formula Sheet. Automatic trading systems for interbank spot FX display the best prices entered into the systems by users and:

A. Display the names of those users along their prices

B. Offer pre-trade anonymity to users quoting prices

C. Offer pre and post-trade anonymity to users quoting prices

D. Offer users the choice of whether to remain anonymous

Click on the Detail Button to view the Formula Sheet.

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?

A. 4.261%

B. 2.202%

C. 1.900%

D. 1.592%

Click on the Detail Button to view the Formula Sheet. An Overnight Indexed Swap is:

A. A fixed-floating money market swap in which the floating rate is an overnight index fixed periodically over the term of the swap

B. A fixed-floating money market swap in which the floating rate is the mean of the overnight index over the term of the swap

C. A fixed-floating money market swap in which the floating rate is an overnight index compounded daily

D. All of the above

Click on the Detail Button to view the Formula Sheet. What is the purpose of a long strangle option strategy?

A. To anticipate very low volatility in the price of the underlying commodity

B. To anticipate moderately high volatility in the price of the underlying commodity

C. To anticipate moderate volatility in the price of the underlying commodity

D. To anticipate very high volatility in the price of the underlying commodity

Click on the Detail Button to view the Formula Sheet. The Model Code recommends that when banks accept a stop-loss order:

A. Management must ensure ongoing lines of communication are in place between the parties.

B. Management must report to the central bank.

C. Management allows only experienced dealers to take such orders.

D. Bank staff must secure the approval of the counterpartys management to accept such orders.

Click on the Detail Button to view the Formula Sheet. What type of institution is the typical issuer of bank bills?

A. Credit institution

B. Investment bank

C. Corporate

D. All of the above

Click on the Detail Button to view the Formula Sheet. Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

A. Will examine the complaint.

B. May consult with the local ACI.

C. Will bring the matter to the attention of the local regulator.

D. None of the above.