3I0-010 Online Practice Questions and Answers

The prompt sending and checking of confirmations is considered a best practice when dealing in:

A. amounts higher than USD 10,000,000.00 or the equivalent in other currencies

B. amounts higher than USD 1,000,000.00 or the equivalent in other currencies

C. any amount unless dealt via a broker

D. any amount by any counterparty

A USD 1 million US Treasury Bill (91 days) is offered at a discount rate of 5.50%. The offer price will be:

A. USD 1,000,000.00

B. USD 986,097.22

C. USD 945,000.00

D. USD 986,287.67

If a bank incurs interest charges from having overdrawn an account due to a late payment from counterparty:

A. The bank is entitled to seek reimbursement from the party responsible for the late payment.

B. Nothing can be done to compensate the bank for the interest charges it incurs.

C. The bank should file a complaint with ACI s Committee for Professionalism.

D. The bank will automatically be reimbursed by the party responsible for the late payment.

You have received the requisite notification from a non-swapping counterparty that their USD correspondent is to be changed from Bank A to Bank B taking effect from value date 15 June 2012. On 14 June 2012, you buy JPY 50 million from your counterparty against USD for value spot. Whom do you pay the USD?

A. bank A

B. bank B

C. neither bank A nor bank B

D. both bank A and bank B

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

Why should the maturity profile of unreconciled items be frequently reviewed?

A. It allows the compliance officer to see how often the reconciliation staff has claimed for an outstanding item

B. It allows management to see what items are pending by value and counterparty, but also how long items have been outstanding and whether there is an improvement in the pace of reconciliations.

C. It allows reconciliation staff to check the bilateral limits with counterparties and to adjust these limits as necessary

D. because the most recent figures have to be published in the balance report

You have 10 credited amounts of 1 million each with same value date and same currency. Which of the following items is most helpful in reconciling these amounts?

A. When the deal was processed is a good indication of the amounts to be reconciled

B. Each deal is registered according to a unique reference which helps in reconciling the items

C. The BIC-address helps you to reconcile the open items

D. None of the above. You should telephone your counterparties to request more information

Your dealers have made the following deals in spot USD/JPY: Sold USD 5,000,000.00 at 111.60 Bought USD 3,500,000.00 at 111.20 Bought USD 2,000,000.00 at 111.50 Sold USD 2,000,000.00 at 111.55

What is your position?

A. Short USD 1,500,000.00 at 112.60

B. Short USD 3,500,000.00 at 111.75

C. Long USD 1,500,000.00 at 111.10

D. Short USD 1,500,000.00 at 111.55

A FRA is:

A. an instrument for managing interest rate risk

B. an instrument for managing credit rate risk

C. an instrument that never impacts P/L

D. the forward leg of an FX swap

Which of these statements is correct?

A. The strike price of a Bermudan option is an average.

B. A Bermudan option can be exercised only on a few specific dates prior to expiration.

C. A Bermudan option can be exercised at any time before its maturity date.

D. A Bermudan option can be exercised only at maturity.