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  • Exam Name: ACI Operations Certificate challenging
  • Last Update: Mar 28, 2024
  • Questions and Answers: 386
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3I0-013 ACI Operations Certificate challenging Questions and Answers

Question # 6

A redemption premium for a bond is:

A.

Always paid in case of an early redemption

B.

Paid, if stipulated in the prospectus, at an early redemption

C.

Always paid at final maturity

D.

Only paid if a bond is redeemed after its initially scheduled maturity

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Question # 7

What does "arrange good value payment" mean?

A.

To cancel an initial payment order and to process a new one with a higher amount

B.

To suspend a payment order until the balance becomes positive again

C.

To adjust the amount of fees to be paid

D.

To change the value date of a payment order

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Question # 8

Which combination of risks: market risk, settlement risk, basis risk, counterparty risk, is associated with a forward FX deal?

A.

Market risk and settlement risk

B.

Market risk, settlement risk and basis risk

C.

Market risk, settlement risk and counterparty risk

D.

Settlement risk and counterparty risk

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Question # 9

The purchase price of a coupon bond:

A.

Is higher than its face value if, and only if, its coupon rate is higher than its yield to maturity on the coupon date

B.

Is higher than its face value if, and only if, its coupon rate is lower than its yield to maturity on the coupon date

C.

Is lower than its face value if, and only if, its coupon rate is higher than its yield to maturity on the coupon date

D.

Is always higher than its face value

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Question # 10

What is the maximum term London Certificates of Deposit are issued?

A.

12 months

B.

18 months

C.

5 years

D.

2 years

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Question # 11

In using futures contracts there is:

A.

Only market risk

B.

Only credit risk

C.

Market risk and credit risk

D.

Market risk, credit risk and delivery risk

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Question # 12

Calculation basis for EUR money market transaction is:

A.

30/360

B.

ACT/365

C.

ACT/ACT

D.

ACT/360

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Question # 13

A dealer makes the following deals in EUR/USD:

Sells EUR 1,500,000.00 at 1.3560

Buys EUR 3,250,000.00 at 1.3542

Sells USD 2,709,600.00 at 1.3548

Buys USD 1,762,410.00 at 1.3557

What is the dealer's position as a result of these trades?

A.

Short EUR 2,450,000.00 at 1.3528

B.

Long EUR 2,450,000.00 at 1.3528

C.

Long EUR 2,000,000.00 at 1.3532

D.

Long EUR 2,450,000.00 at 1.3525

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Question # 14

Minimum reserves at the European Central Bank are:

A.

Never remunerated

B.

Remunerated at the EONIA rate

C.

Remunerated at the rate of the deposit facility

D.

Remunerated at the main refinancing rate

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Question # 15

Who is responsible for producing the Model Code?

A.

The Federation of Bankers Associations

B.

The International Foreign Exchange Market Practices Committee

C.

The G7 Committee of Central Banks

D.

ACI - The Financial Markets Association

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Question # 16

What is a nostro bank account?

A.

An account held with another bank

B.

An account another bank holds with you

C.

A trust account

D.

A suspense account

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Question # 17

Which of the following statements about "standard settlement instructions" (SSI) is correct?

A.

The Head of Operations has the sole responsibility of ensuring the correctness and validity of the SSI set up.

B.

SSIs should be stored and maintained in the bank's general static data system.

C.

Each institution should have a separate SSI team to prevent / minimize the potential risk of fraud.

D.

SSI staff should be fully integrated within Operations to insure consistent and reliable settlement guidelines.

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Question # 18

You receive a trade to process with counterparty settlement instructions that differ from those you hold on your standard settlement instruction file (SSI).

A.

You should make the payment in accordance with the SSI you are holding without referring to your dealer or contacting the counterparty

B.

You should make the payment in accordance with the trade instructions

C.

You should check the SSI with your dealer and contact the counterparty to seek his specific instructions

D.

You should not make the payment

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Question # 19

What is the standard for settlement of cross-border DVP systems?

A.

T+3, meaning that settlement is due three days after the deal date

B.

T+4, meaning that settlement is due four days after the deal date

C.

T+1, meaning that settlement is due one day after the deal date

D.

T+2, meaning that settlement is due two days after the deal date

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Question # 20

When completing a nostro reconciliation, what does an outstanding statement credit possibly signify?

A.

The non-receipt of funds from a counterparty

B.

The non-payment of funds to a counterparty

C.

The duplicate payment of funds by a counterparty

D.

The duplicate receipt of funds from a counterparty

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Question # 21

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

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Question # 22

The notional amount in an interest rate swap is:

A.

The sum of all the fixed and floating rate payments

B.

The net difference between fixed and floating rate payments

C.

The amount on which floating and fixed interest payments are calculated

D.

The amount at which the two counterparties can close-out their transaction

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Question # 23

What is the Bank Identifier Code (BIC)?

A.

A worldwide unique identification code for both financial and non-financial institutions

B.

A unique identification code for European financial institutions

C.

The short form of the IBAN-code

D.

A unique access-code to SWIFT-platforms

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Question # 24

Sterling Treasury bills can be issued with maturities of:

A.

3 months, 6 months and 9 months

B.

1 month only

C.

Up to 2 years

D.

1 month, 3 months, 6 months and 12 months

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Question # 25

What is the "spread" in an interest rate swap (IRS)?

A.

The interest rate differential between the fixed and floating leg of the swap

B.

The brokerage fee for an interest rate swap transaction

C.

The payment made when a swap is terminated

D.

The difference between the swap rate and the benchmark government yield

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Question # 26

On 15 April 2010 you buy a bond whose coupon falls on 15 January 2010. The interest basis is 30/360. Using bond settlement T+1, how many days do you apply for the interest calculation?

A.

89 days

B.

90 days

C.

91 days

D.

92 days

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Question # 27

The CLS-Bank (Continuous Linked Settlement) is one of the ways through which FX transactions can be settled. Why was this bank founded?

A.

To simplify domestic payments

B.

To handle interbank liquidity more efficiently

C.

To accelerate cross-border payments

D.

To minimize settlement risks

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Question # 28

What is a correspondent bank?

A.

A bank which processes payment orders on behalf of another bank

B.

A bank which processes payment orders on national level only

C.

A bank which has subsidiaries in CLS-countries

D.

A bank which has a minimum reserve account in more than one country

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Question # 29

The market standard legal agreement for Interest Rate Swaps is:

A.

ISDA

B.

ACI

C.

SIFMA/ICMA

D.

ICMA

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Question # 30

What is the cut-off time for a same day customer payment using TARGET2?

A.

16:00 (4:00 p.m.) Central European Time (CET)

B.

17:00 (5:00 p.m.) Central European Time (CET)

C.

18:00 (6:00 p.m.) Central European Time (CET)

D.

18:30 (6:30 p.m.) Central European Time (CET)

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Question # 31

Which details do not need to be mentioned in a trade confirmation?

A.

Economic: such as initial and final amounts, rates

B.

Product identification: counterparty, currency, index

C.

Identification of the dealer: identity, title, direct phone number

D.

Dates including the trade day: initial day, final day, settlement day

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Question # 32

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.

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Question # 33

You take a EUR deposit on Monday, 13 February. Assuming there are no intervening bank holidays, what is the one-month maturity date?

A.

Monday, 13 March

B.

Tuesday, 14 March

C.

Wednesday, 15 March

D.

Thursday, 16 March

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Question # 34

What is the deadline for settling interbank spot-deals in EUR via the TARGET2 system?

A.

10:00 CET

B.

18:00 CET

C.

12:00 CET

D.

15:00 CET

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Question # 35

What is done with counterparties’ confirmations?

A.

They are scanned for money laundering activities and afterwards destroyed

B.

They are forwarded to the deal capturer to check the completeness of the deal

C.

They are matched as soon as possible after receipt

D.

They are archived after reception

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Question # 36

Which clearing system allows a transfer to be settled with immediate finality?

A.

EAF

B.

EBA

C.

RTGS

D.

SWIFT

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Question # 37

Internationally, USD FRAs are settled with reference to which market rate?

A.

LIBOR

B.

FEDFUNDS

C.

LIBID

D.

EURIBOR

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Question # 38

If the 90-day rate is 3.10% and the 180-day is 3.50%, what is the 120-day rate using straight-line interpolation?

A.

3.20%

B.

3.21%

C.

3.23%

D.

3.30%

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Question # 39

What is the first task of the cash positions keeper every day?

A.

Makes sure the opening position for the current day is the agreed and reconciled position from the previous day

B.

Makes sure the previous day1s pending position is the opening position for the current day

C.

He/she checks to see which dealer is in charge of which currency for that day

D.

He/she checks to see which countries have bank holidays that day

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Question # 40

Which of the following currencies is eligible for CLS settlement?

A.

ZAR

B.

TRY

C.

MYR

D.

CNY

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Question # 41

Which one of the following excerpts completes this statement of a best market practice? “Any exception to the confirmation process should be resolved?

A.

No later than the value date

B.

Within 2 days

C.

Within 1 week

D.

On the day it is discovered

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Question # 42

What is a SWIFT message type 210?

A.

A request for financial institution transfer

B.

A general financial institution transfer

C.

A financial institution transfer for its own account

D.

A notice to receive

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Question # 43

As to futures contracts:

A.

The maintenance margin is a predetermined fraction of initial margin

B.

The initial margin is a predetermined fraction of maintenance margin

C.

The maintenance margin represents the brokerage costs

D.

The maintenance margin represents management fees

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Question # 44

You have five outstanding amounts with five different values. Which of the following should be investigated first?

A.

The most recently processed deal

B.

The counterparties in your own country

C.

The counterparty which claims first

D.

Those positions with the highest loss potential

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Question # 45

Which risk factors fall under counterparty risk?

A.

Currency risk, interest rate risk and swap risk

B.

Settlement risk, delivery risk and replacement cost

C.

Operational risk

D.

Settlement risk and swap risk

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Question # 46

If an overnight EUR/USD FX swap is traded on Tuesday, 19 June, and there are no currency holidays during the week of June 18 - 22, what would be the value dates of the two swap legs?

A.

18 June against 19 June

B.

19 June against 20 June

C.

20 June against 21 June

D.

21 June against 22 June

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Question # 47

Which of the following is required for institutions acting as prime brokers?

A.

They must remain neutral and stay out of disputes between their customers.

B.

They must rely on the execution venue to resolve disputes.

C.

They must delegate the resolution of broken trades downstream to their clients.

D.

They must take responsibility for the swift resolution of any disputes.

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Question # 48

If today is Thursday, 12 December, what is the spot date for a EUR/USD transaction?

A.

14 December

B.

15 December

C.

16 December

D.

17 December

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Question # 49

When should discrepancies between front-office and back-office systems be resolved?

A.

By the end of the trading day

B.

On the next business day

C.

On the value date

D.

As soon as they become apparent

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Question # 50

A bank in Luxembourg has dealt an interbank money market trade with a Canadian bank and must pay USD. Whom does the Luxembourg bank you instruct for payment?

A.

Its correspondent bank in Canada

B.

Its national central bank

C.

The European Central Bank

D.

Its correspondent bank in the USA

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Question # 51

In trading, which is the most often used deal capture system?

A.

An internet-based input system

B.

A SWIFT-based input system

C.

A TARGET-based input system

D.

A screen-based input system

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Question # 52

The discount or premium on forward foreign exchange points is calculated based on:

A.

The level of interest rates in the base currency

B.

The level of interest rates in the counter currency

C.

The differential between the interest rates in the two currencies

D.

The current volatility in the FX markets

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Question # 53

You are an issuer of a straight bond and you want to change your exposure from a fixed rate to a floating rate because you expect a fail in interest rates. What would you do?

A.

Buy an IRS

B.

Sell an IRS

C.

Buy a FRA

D.

Do nothing because the bond coupon is already a fixed rate

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Question # 54

What is the disadvantage having separate cash accounts?

A.

You need more back office staff to book the fees

B.

One account could be overdrawn while the other has excess funds. The surplus balance would earn less interest than the amount being charged on the corresponding overdraft if an error occurs in settlement. Thus there is a risk of overdraft interest versus idle balances

C.

One securities account could be overdrawn while the other has excess securities. The surplus balance would earn less interest, if any, than that being charged on the corresponding overdraft if an error occurs in settlement

D.

The workload of the auditors, compliance officers, risk managers and dealers will be higher

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Question # 55

What type of documentation is recommended for repos in the international markets?

A.

The SEC Emergency Short Sale Rules

B.

The ISDA Master Agreement

C.

The Global Master Repurchase Agreement published by the ICMA

D.

An International Securities Lending Agreement

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Question # 56

The difference between the bid and the offer rate of a money market quotation is called:

A.

The margin

B.

The spread

C.

The variation

D.

The premium

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Question # 57

S.S.I. stands for:

A.

Secure Software Integration

B.

Standard Settlement Instructions

C.

Swiss Spot Index

D.

SWIFT Settlement Instruction

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