3I0-013 ACI Operations Certificate challenging Question and Answers

Swap a fixed leg into a variable leg

Buy or sell the currency of your choice

Arbitrage between foreign exchange and interest rates

Arbitrage between deposits and forward points

EBA

CLS

TARGET2

CHAPS

Assets lent by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

Liabilities owned by members of a payments system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

Assets owned by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

Assets swapped by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

At 0.1255

At 1.2550

At 12.5500

At 125.50

SSIs, confirmation methods, global settlement limits, client contacts

SSIs and confirmation methods only

Credit lines and trading limits only

Solely client contacts for the Front Office and Operations

Is responsible only for the settlement of those securities

Is responsible only for safeguarding the securities that you have on your account

Is responsible for safeguarding both the securities that you have on your account and their settlement

Is never responsible for safeguarding securities

Settlement risk

Translation risk

Replacement risk

Operational risk

Market risk and settlement risk

Market risk, settlement risk and basis risk

Market risk, settlement risk and counterparty risk

Settlement risk and counterparty risk

The face value of 5,000,000.00

More than 5,000,000.00

Less than 5,000,000.00

Cannot decide based on the information supplied

Certificate of Deposit (CD)

FRA

US Treasury Note

ECP

The activities of their end users

The end user's observance of the rules of individual execution venues

The end user's membership in a registered trade association

The end users adherence to market best practice

The settlement of a FRA is paid at maturity date.

The settlement amount is paid at the trade date of a FRA.

The cash settlement amount on a FRA is usually a discounted amount.

The settlement amount on a FRA is not based on the LIBOR for the relevant period.

EUR 620.83

EUR 868.06

EUR 968.06

EUR 2,183.33

Cash-settled currency forward between two counterparties

Exchange-traded, cash-settled currency forward

Over-the-counter, cash-settled spot FX

Principal-settled currency forward between two counterparties

Nostro reconciliations, the Cash Management Department and Operations

Front Office, the Cash Management Department and Operations

Front Office, Nostro reconciliations and Operations

Front Office, Nostro reconciliations and the Cash Management Department

The United Kingdom

The United States of America

Kenya

Gambia

Amendments to customer standing data should be subject to 4 eyes control and only changed if the appropriately authorized documentation is provided.

The set up of settlement instructions and the confirmation method should be fixed when setting the first transaction.

No trading should be done without first identifying and setting up the counterparty.

Counterparty identification and setup of settlement instructions should be completed in less than 2 working days.

SWIFT MT 103+

SWIFT MT 202

SWIFT MT 204

SWIFT MT 210

CHAPS

TARGET 2

EAF

FX-NET

Bears a risk limited to the premium paid

Bears a substantial risk

Bears a risk limited to the premium received

Bears no risk

The funds must be in the nostro account of the beneficiary institution by close of business on the agreed upon value date

The funds must be in the nostro account of the beneficiary institution by the beginning of the next business day

The value of interest to be received is higher than the value of fees to be paid

The funds must be in the internal cash account of the clearing house by close of business on the agreed upon value date

An account held with another bank

An account another bank holds with you

A trust account

A suspense account

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

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.

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

Because the most recent figures have to be published in the balance report

It gives the counterparty more time to cancel a deal

It reduces errors and costs

It gives front-office staff more time to process the payment orders

It reduces the number of trades

A collateral agreement eliminates the future replacement risk

A collateral agreement can reduce market risk

A collateral agreement can reduce operational risk

A collateral agreement can reduce the replacement risk

It helps the risk manager to adjust the limits

It allows the cash positions keeper to retrace the arrival of the funds

It is essential in determining compensation arrangements at a later date

The auditors require these logs for their statistics

Acts as counterparty to each buyer and seller

Is responsible for market making

Requires members to cover their commitments on a week-to-week basis

Does not regulate trader’s activities

Refuse, input the deal as normal but keep the request to yourself

Input the deal the following morning as requested by the Chief FX trader

Refuse, input the deal and tell another spot trader

Refuse, input the deal and report the incident to your superior

The FX spot and forward dealing input and processing module

Standard back office features

The money market dealing and processing module

The securities trading and processing module

Has the obligation to convert his bond

Has the right to convert his bond

Must wait for the decision of the issuer if he wants to convert his bond

Has the obligation to convert the coupon into a variable or a fixed rate

An exposure in Singapore Dollar (SGD)

An exposure in Thai Baht (THB)

An exposure in Philippine Peso (PHP)

An exposure in Hong Kong Dollar (HKD)

The front office

The back office

The middle office

The compliance department

The counterparty would cancel the deal

The bilateral limit with the counterparty would have to be adjusted

The counterparty would demand interest on the late payment

There are no adverse financial consequences

A level of risk on derivatives

A type of option

A derivative benchmark

A derivative strategy using options

Receives a lower price than he originally paid

Receives a higher price than he originally paid

Receives a price calculated using the price originally paid

There is not enough information to know how much the seller receives

Transaction irregularities

Confirmation discrepancies

CIS mismatches

Settlement discrepancies

Official prices calculated by the exchange at the close of trading for the purpose of making margin calculations

Official prices calculated by a panel of central banks

Official prices calculated by the central bank where the stock exchange is located

Never used

Writing the deal ticket

Arranging the delivery of currency payments

Checking the availability of counterparty limits

Agreeing on the FX rate with the counterparty's middle office

The valuation and transfer of collateral in general collateral (GC) repos only

The valuation and transfer of collateral in tri party repos only

The valuation and transfer of collateral in special repos only

The valuation and transfer of collateral in any type of repo

The date a trade is undertaken

The date the fixing rate is agreed upon

The date the settlement occurs

The date confirmations are exchanged between counterparties

USD payment to Bank A

USD payment to Bank B

JPY payment to Bank A

JPY payment to Bank B

VoIP

Mail, fax

Phone, SWIFT

Reuter Dealing

The notional amount of a contract

A deposit amount per contract that is determined by the futures exchange

The maximum net loss during the contract period

The minimum net loss during the contract period

Operational risk

Market risk

Systemic risk

Credit risk

The duplicate receipt of funds from a counterparty

The non-payment of funds to a counterparty

The duplicate payment of funds to a counterparty

The non-receipt of funds from a counterparty

The counterparty does not need to be notified about any alterations to original payment instructions or SSIs.

Any alterations to original payment instructions or SSIs are to be agreed to by the relevant parties involved either by fax or e-mail.

Alterations must be agreed to by the parties involved via a written legally binding document or an authenticated confirmation message.

Alterations need to be agreed to by the relevant parties involved and must be verbally confirmed.

London

Frankfurt

New York

Hong Kong

FRNYUS33

ECBFDEFF

BCLXLULL

SNBZCHZZ

Pay EUR 10,000.00

Receive EUR 10,000.00

Pay EUR 9,993.75

Receive EUR 9,993.75

Keep the ticket in “stand-by mode” until a matching confirmation is received

Immediately refer the ticket to the compliance officer

Refer the ticket to the FX dealer for further details

Refer the ticket to the nostro account manager for further instructions

Accounting

Adjustment of bilateral limits

Netting

Nostro reconciliation

You agree and pay back to the customer the capital plus 2.00% interest calculated on 30 days

You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.20% calculated on 30 days

You agree and pay back to the customer the capital plus 2.00% interest on 30 days less your refinancing costs of 0.10% calculated on 60 days

You agree and pay back to the customer the capital plus 2.00% interest on 90 days minus the actualization of this amount at 2.20% calculated over 60 days

The rate

The amount

The swap points

Settlement information

The original face value of the CD

More than the originally paid value

Less than the originally paid value

There is too little information to decide