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Where repos or securities lending transactions are entered into, the Model Code recommends:

A.

Documentation should be in place beforehand.

B.

Management should approve all transactions.

C.

Copies of the underlying documentation should be lodged with regulators.

D.

All of the above.

What is a master agreement intended to do?

A.

Describe the parameters of a dealing relationship

B.

Set out the rights and obligations of two parties

C.

Apply to all transactions between two parties

D.

All of the above

The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75- 80%. As collateral, you are offered EUR 25,000,000.00 nominal of the 5.5% OAT April 2015, which is worth EUR 28,137,500.00. If you impose an initial margin of 1%, the Repurchase Price is:

A.

EUR 27,947,276.43

B.

EUR 27,946,077.08

C.

EUR 27,950,071.43

D.

EUR 27,948,871.97

In foreign exchange markets, the first currency in a currency pair is:

A.

The quoted currency

B.

The base currency

C.

The counter currency

D.

The terms currency

What is the purpose of the Liquidity Coverage Ratio?

A.

to mitigate market replacement risk across markets

B.

to eliminate funding mismatches by establishing a minimum acceptable amount of stable funding

C.

to ensure that banks have enough high-quality liquid assets to survive a 30-day period of acute market stress

D.

to minimize duration risk on a bank’s assets over a one-year horizon

What are de minimis claims?

A.

claims of less than USD 100.00

B.

claims of less than USD 1,000.00

C.

claims of less than EUR 100.00

D.

claims of less than EUR 1,000.00

If making a claim in respect of “use of funds”, payments should be settled within how many days?

A.

15

B.

20

C.

35

D.

40

Any breaches in confidentiality should be:

A.

documented and reported to the local regulator

B.

communicated to local staff by a confidential internal circular

C.

investigated immediately according to a properly documented procedure

D.

reported to the ACI’s Committee for Professionalism to investigate and advise accordingly

The seller of a floor:

A.

Receives compensation if a reference interest rate falls below an agreed level

B.

Pays compensation if a reference interest rate falls below an agreed level

C.

Receives compensation if a reference interest rate rises above an agreed level

D.

Pays compensation if a reference interest rate rises above an agreed level

If a dealer needs to hedge an over-lent 3x6 position against 1MM dates for which the FRA is quoted 1.30-1.34% and futures at 98.64, which would be cheapest for him (ignoring margin costs on futures positions) to cover his gap?

A.

FRA

B.

Futures

C.

No difference

D.

Too little information to decide

Which of the following statements about Eurodollar deposits is correct?

A.

Eurodollar deposits can only be dealt by banks in the USA

B.

US withholding tax applies to Eurodollar deposits

C.

Eurodollar deposits are free of US reserve requirements

D.

Eurodollar deposits are subject to US exchange controls

You are entering into a swap as a fixed rate receiver with Party A and into an offsetting position with party B. All other things being equal, which of the scenarios below will lead to the greatest increase in the sum of the Credit Value Adjustments for A and B?

A.

upward shift of the swap curve and rating downgrade of party A

B.

downward shift of the swap curve and rating downgrade of party A

C.

downward shift of the swap curve and rating downgrade of party B

D.

downward shift of the swap curve only

After having quoted a rate of 1.5005-10, the quoting bank says, “Your risk”. This means:

A.

The quoted rate is subject to change at the risk of the price-taker

B.

The quoting bank is reminding you of the market risk of your potential trade

C.

This is a requirement of any market maker

D.

The market maker needs to check your credit limit

The process of confirming trades is a function that can be performed by:

A.

any dealer as long as he/she is not a party to the trade

B.

staff in the back-office/operations who are independent of the trade

C.

staff in the dealing room who are not dealing

D.

any staff outside the dealing room

A prime broker may not reject a trade given up if:

A.

the trade is not within the specified tenor limits

B.

the trade is not within the specified credit limits

C.

the trade details provided by the executing dealer and the client match

D.

the trade is a permitted transaction type as specified in the give-up agreement with the executing dealer