Download ACI.3I0-012.PracticeTest.2018-05-25.440q.vcex

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Exam ACI Dealing Certificate
Number 3I0-012
File Name ACI.3I0-012.PracticeTest.2018-05-25.440q.vcex
Size 1 MB
Posted May 25, 2018
Download ACI.3I0-012.PracticeTest.2018-05-25.440q.vcex

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Demo Questions

Question 1

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:


  1. European-style option
  2. American-style option
  3. Bermudan option
  4. Asian option
Correct answer: C



Question 2

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:


  1. should be assumed to have zero duration
  2. should be treated like other instantly variable rate liabilities, such as overnight money market borrowing.
  3. should be assumed to have a low correlation with money market reference rates
  4. represent a minor contributor to interest rate risk and can safely be disregarded
Correct answer: C



Question 3

If the duration gap is zero, how will a small parallel shift in interest rates affect the market value of the bank’s equity?


  1. If interest rates rise, the market value of equity will increase
  2. If interest rates rise, the market value of equity will decrease
  3. The bank is immunised from changes in interest rates.
  4. The market value of equity will decrease due to an increase in interest rates
Correct answer: C



Question 4

Which of the following statements is correct regarding duration?


  1. It is a measure of the average price of a financial instrument.
  2. It doesn’t take into account the timing and market value of cash flows.
  3. It increases if the average coupon increases.
  4. It decreases as maturity decreases
Correct answer: D



Question 5

Using reprising gap analysis, a bank’s balance sheet is considered liability-sensitive to market interest rate changes, if:


  1. more liabilities than assets will be reprised in the near term
  2. more assets than liabilities will be reprised in the near term
  3. more assets than liabilities have variable rates or short residual maturities
  4. non-interest bearing liabilities are greater than non-interest bearing assets
Correct answer: A



Question 6

Which of the following statements about the Liquidity Coverage Ratio is correct?


  1. The LCR is a measure to ensure that the reserve of high quality liquid assets is sufficient to cover short term demand for liquidity in a stress situation.
  2. the ratio (cash outflow in a 30-day stress period divided by high quality liquid assets) has to be greater than 100%.
  3. Covered bonds are class 1 assets.
  4. Obligations issued by central banks or government agencies are class 2 assets.
Correct answer: A



Question 7

Which one of the following statements about mark-to-model valuation is correct?


  1. Mark-to-model valuation is used for exchange-traded positions to ensure correct pricing.
  2. Asset managers are not allowed to use mark-to-model valuation.
  3. Mark-to-model valuation is used for complex financial instruments; it is always accurate and in line with potential tradable prices.
  4. Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.
Correct answer: D



Question 8

A closed position in a particular foreign currency exists:


  1. when the net spot position plus the forward position plus the delta equivalent of the foreign currency options book add up to zero
  2. when the forward purchases of a foreign currency are equivalent to the equity position in that same currency
  3. when the reverse repurchases of foreign currency are equal to the forward purchases of the functional currency
  4. when the maturity structure of the assets in one currency is closely matched to the maturity structure of liabilities in another
Correct answer: A



Question 9

Which of the following are all goals of the originator of securitized assets?


  1. to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits, to increase the size of the balance sheet
  2. to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits
  3. to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to decrease the size of the balance sheet
  4. to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to increase the size of the balance sheet
Correct answer: B



Question 10

Which of the following risks are considered market risks?


  1. interest rate, currency, equity and commodity risk
  2. interest rate, currency, equity and default risk
  3. interest rate, equity, liquidity and default risk
  4. legal, reputation and regulatory risk
Correct answer: A



Question 11

An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:


  1. European-style option
  2. American-style option
  3. Bermudan option
  4. Asian option
Correct answer: C



Question 12

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:


  1. should be assumed to have zero duration
  2. should be treated like other instantly variable rate liabilities, such as overnight money market borrowing.
  3. should be assumed to have a low correlation with money market reference rates
  4. represent a minor contributor to interest rate risk and can safely be disregarded
Correct answer: C



Question 13

If the duration gap is zero, how will a small parallel shift in interest rates affect the market value of the bank’s equity?


  1. If interest rates rise, the market value of equity will increase
  2. If interest rates rise, the market value of equity will decrease
  3. The bank is immunised from changes in interest rates.
  4. The market value of equity will decrease due to an increase in interest rates
Correct answer: C



Question 14

Which of the following statements is correct regarding duration?


  1. It is a measure of the average price of a financial instrument.
  2. It doesn’t take into account the timing and market value of cash flows.
  3. It increases if the average coupon increases.
  4. It decreases as maturity decreases
Correct answer: D



Question 15

Using reprising gap analysis, a bank’s balance sheet is considered liability-sensitive to market interest rate changes, if:


  1. more liabilities than assets will be reprised in the near term
  2. more assets than liabilities will be reprised in the near term
  3. more assets than liabilities have variable rates or short residual maturities
  4. non-interest bearing liabilities are greater than non-interest bearing assets
Correct answer: A



Question 16

Which of the following statements about the Liquidity Coverage Ratio is correct?


  1. The LCR is a measure to ensure that the reserve of high quality liquid assets is sufficient to cover short term demand for liquidity in a stress situation.
  2. the ratio (cash outflow in a 30-day stress period divided by high quality liquid assets) has to be greater than 100%.
  3. Covered bonds are class 1 assets.
  4. Obligations issued by central banks or government agencies are class 2 assets.
Correct answer: A



Question 17

Which one of the following statements about mark-to-model valuation is correct?


  1. Mark-to-model valuation is used for exchange-traded positions to ensure correct pricing.
  2. Asset managers are not allowed to use mark-to-model valuation.
  3. Mark-to-model valuation is used for complex financial instruments; it is always accurate and in line with potential tradable prices.
  4. Mark-to-model valuation refers to prices determined by financial models, rather than actual market prices.
Correct answer: D



Question 18

A closed position in a particular foreign currency exists:


  1. when the net spot position plus the forward position plus the delta equivalent of the foreign currency options book add up to zero
  2. when the forward purchases of a foreign currency are equivalent to the equity position in that same currency
  3. when the reverse repurchases of foreign currency are equal to the forward purchases of the functional currency
  4. when the maturity structure of the assets in one currency is closely matched to the maturity structure of liabilities in another
Correct answer: A



Question 19

Which of the following are all goals of the originator of securitized assets?


  1. to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits, to increase the size of the balance sheet
  2. to increase funding diversification , to reduce funding costs, to achieve regulatory and accounting benefits
  3. to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to decrease the size of the balance sheet
  4. to increase funding diversification , to reduce operational risk, to achieve regulatory and accounting benefits, to increase the size of the balance sheet
Correct answer: B



Question 20

Which of the following risks are considered market risks?


  1. interest rate, currency, equity and commodity risk
  2. interest rate, currency, equity and default risk
  3. interest rate, equity, liquidity and default risk
  4. legal, reputation and regulatory risk
Correct answer: A









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