ACI 3I0-008 Exam Practice Test Instant Access

Question 1

EURIBOR is the:

ADaily fixing of EUR interbank deposit rates in the European market

BDaily fixing of EUR interbank deposit rates in the London market

CAnother name for EUR EIBOR

DThe ECBs official repo rate

Answer : A

Question 2

What is the value date of a 6-month outright forward FX transaction dealt today, if todays spot date is Monday, 30th June? Assume there are no bank holidays.

A27th December

B30th December

C31stDecember

D1st January

Answer : C

Question 3

The intrinsic value of a long call option:

AFalls and rises with the price of the underlying commodity, but is always positive

BRises if the price of the underlying commodity falls and vice versa

CDepends solely on the volatility of the price of the underlying commodity

DBecomes negative if the market price of the underlying commodity falls below the strike price of the option

Answer : A

Question 4

A dealer does the following deals in EUR/USD:

buys EUR 1 m at 11020

sells EUR 3 m at 1.1022

buys EUR 2 m at 1.1002

buys EUR 1.5 m at 1.1012

What position does the dealer now have?

ALong EUR 1.5 m at 1.0984

BShort EUP 1.5 m at 1.1036

CLong EUR 1.5 m at 1.1012

DShort EUR 3.0 mat 1.1025

Answer : A

Question 5

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?

ATransaction exposure

BTranslation exposure

CEconomic exposure

DNone

Answer : C

Question 6

What is the risk of dealing through an agent with an unknown principal?

AYou may not be able to ensure that your firm can avoid suspicion of trading on non-public information or other allegations of bad or illegal trading practice.

BYou may not be able to net your exposure in an insolvency.

CYou may not be able to net your exposure for capital adequacy purposes.

DAll of the above.

Answer : D

Question 7

Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

AIt is good practice for compliance, legal or credit functions to identity counterparties before the execution of a deal.

BManagement should have in place a clearwritten policy and procedures governing such transactions.

CManagement needs to be aware of the risks involved, particularly with respect to credit exposure and money laundering.

DAll of the above.

Answer : D

ACI 3I0-008 ACI Dealing Certificate Exam Practice Test