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When differences in payment arise because of errors in the payment of funds:

A.

claims should be made for the costs incurred by the injured party and include all administration costs

B.

no party involved can be enforced to contribute to achieve an equitable resolution to the problem

C.

no market participant should be unjustly enriched or injured by the action/error of another market participant

D.

claims are calculated on the full principal amount of the failed payment with the interest rate imposed by the injured party

What is the meaning of CCP within the Basel framework?

A.

Collateralized Clearing Process

B.

Central Clearing Counterparty

C.

Collateralized Counterparty Protection

D.

Collateralized Credit Protection

All prices quoted by brokers should be taken to be:

A.

under reference

B.

firm, but not necessarily in marketable amounts

C.

firm, unless otherwise qualified

D.

merely indicative

A dealer in the spot foreign exchange market has to assume that a price given to a voice broker is only valid:

A.

for a short length of time, usually 30 seconds

B.

until the price has been taken “off” by the dealer

C.

for a short length of time, typically a matter of seconds

D.

for a minute or two

The Model Code stipulates that you have a right to qualify your quotes in terms of amounts:

A.

if you do so when you make the price

B.

provided the amounts are marketable

C.

once you have discovered the name of the counterparty for credit reasons

D.

at anytime

Which of the following does not represent an operational risk as defined by Basel rules?

A.

theft of information

B.

damage to an organization through loss of its reputation or standing

C.

market manipulation

D.

loss incurred from the use of incorrect documentation

When would an exporter commonly use an NDF?

A.

when receiving THB in 1 month

B.

when receiving HKD in 2 months

C.

when receiving PHP in 2 bank business days

D.

when receiving KRW in 3 months

Under the Model Code, if a broker shouts “done” or “mine” at the very moment a dealer shouts “off”:

A.

No deal is done and the broker should inform both counterparties accordingly.

B.

The deal is done and the broker should inform both counterparties accordingly.

C.

The matter should be resolved in consultation with senior management of the 3 institutions.

D.

The ACI’s Committee for Professionalism will investigate and advise accordingly.

Which of the following is true regarding the consummation of a deal?

A.

verbal agreements are considered binding

B.

written confirmations always override terms verbally agreed to

C.

deals agreed to verbally can be done subject to documentation

D.

verbal agreements are never to be considered legally binding

How would you delta hedge a deeply “in-the-money” short put option?

A.

Go short of the underlying commodity equal to 50% of the size of the option contract

B.

Go long of the underlying commodity equal to 50% of the size of the option contract

C.

Go long of the underlying commodity equal to more than 50% of the full size of the option contract

D.

Go short of the underlying commodity equal to more than 5O% of the full size of the option contract

By what means should a financial institution preferably submit SSI changes and notifications to its clients?

A.

e-mail

B.

fax or letter

C.

MTn99 SWIFT message

D.

MT670/671 SWIFT message

What should be done when a voice broker hits a dealer’s price as “done” at the very instant the dealer calls “off”?

A.

The deal should not be concluded and the broker should inform both counterparties accordingly.

B.

The transaction should be concluded and the broker should inform both counterparties accordingly.

C.

The broker should immediately inform both counterparties that the deal will have to be renegotiated.

D.

The broker should decide whether the transaction is concluded or not and inform both counterparties accordingly.

A CD with a face value of USD 50,000,000.00 and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

A.

+USD 373,599.00

B.

+USD 186,099.00

C.

-USD 1,400.99

D.

Nil

Which of the following is not transferable?

A.

Euro certificate of deposit

B.

US Treasury bill

C.

CP

D.

Call deposit

In trade confirmation, which one of the following statements about “matching” is correct?

A.

matching should be performed by no later than the day after trading day

B.

matching processes are manual and may not be automated

C.

matching should be performed as soon as possible upon receipt of the confirmation

D.

confirmation matching should be a post-settlement workflow activity