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If a broker refers to “the payer of 5-year euro at 4.12”, what is this party doing?

A.

Paying a fixed rate of 4.12% per annum on a 30/360 basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.

B.

Paying a fixed rate of 4.12% per annum on an actual/actual basis over 5 years in euros through an interest rate swap in exchange for receiving a floating rate of 6-month Euribor on an actual/360 basis reset semi-annually and paid in arrears.

C.

Paying a 5-year euro deposit and receiving a rate of interest of 4.12% on an actual/360 basis. Taking a 5-year euro deposit and paying a rate ol interest of 4.12% on an actual/360 basis.

You need to buy USD 5,000,000 against GBP and are quoted the following rates concurrently by two separate banks: 1.6045-50 and 1.6047-52. At which rate do you trade?

A.

1.6045

B.

1.6047

C.

1.6050

D.

1.6052

Which of the following is not true?

A.

The Model Code is published by ACI’s Committee for Professionalism.

B.

The Model Code sets out the practicalities of dealing in those financial instruments listed in the Model Code.

C.

The Model Code is an attempt to deal with the legal issues relating to every conceivable financial instrument.

D.

The Model Code sets out the manner and spirit in which foreign exchange and money market business should be conducted in order that participants maintain high standards of professionalism, integrity and ethical conduct.

A dealer has been asked by a broker to go to an exclusive club for the third time in a week. He should:

A.

Agree. Entertainment is a normal part of business.

B.

Refuse. This entertainment is excessive in value and frequency.

C.

Agree but insist on paying halt the cost.

D.

Refuse. Going back to the same club is clearly excessive entertainment.

Bank XYZ calls you for a quote in EUR/USD for EURO 20 million. If you decide to quote to Bank XYZ:

A.

You must be prepared to deal up to EUR 20 million.

B.

You may quote without stating the amount you are prepared to deal.

C.

You are only committed to deal in a marketable amount.

D.

None or the above.

A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him?

A.

1.4323-26

B.

1.4320-25

C.

1.4315-20

D.

1.4318-23

You are quoted the following market rates:

spot GBP/USD. 1.6530

9M (272-day) GBP. 3.60%

9M (272-day) USD. 1.95%

What are the 9-month GBP/USD forward points?

A.

+206

B.

+197

C.

-195

D.

-204

The Model Code recommends that, in the case or complaints about transactions, management should:

A.

Ensure complaints are investigated by the senior management or a firm not involved in the disputed transaction.

B.

Ensure complaints are rairly and independently investigated, in the first instance, by the ACIs Committee for Professionalism.

C.

Ensure complaints are investigated by representatives of a broking firm not directly involved in the disputed transaction and selected by both parties to the dispute.

D.

Ensure complaints are fairly and independently investigated, whenever practicable, by staff not directly involved in the disputed transaction.

Which of the following is true?

A.

The CME eurodollar futures contract has a tick value (for one full basis point equivalent) of USD25 and a face value of USD 1,000,000

B.

The Euronext. LIFFE EURIBOR futures contract has a tick value (for one full basis point equivalent) of EUR25 and a face value of EUR 1,000,000

C.

The Euronext.LIFFE CHF futures contract has a tick value (for one full basis point equivalent) of CHF25 and a face value of CHF 1,000,000

D.

All of the above

If GSP/USD is quoted to you at 1.61 20-30, how much GSP would you receive if you sold USD 2000,000?

A.

1,239,925.60

B.

1,237,873.80

C.

1,240,694.79

D.

1,242,720.50

Bank participants have a duty to make it clear that their prices are firm or merely indicative:

A.

Only if they are dealing with brokers.

B.

Only if they are dealing in a fast moving market.

C.

Only if the amount is not marketable.

D.

At all times.

You bought a EUR 8,000,000 6x9 FRA at 4.50%. The settlement rate is 3-month (90-day) EURIBOR, which is fixed at 3.50%. What is the settlement amount at maturity?

A.

You pay EUR 20,000.00

B.

You receive EUR 20,000.00

C.

You pay EUR 19,826.52

D.

You receive EUR 19,826.52

Using the following rates:

3M (90-day) eurodeposits3.50%

6M (180-day) eurodeposits3.75%

What is the rate for a deposit, which runs from 3 to 6 months?

A.

3.625%

B.

3.285%

C.

3.965%

D.

3.835%

You are quoted the following market rates:

spot EUR/USD. 1.2250

3M (91-day) EUR 2.55%

3M (91-day) USD. 2.00%

What is 3-month EUR/USD?

A.

1.2232

B.

1.2233

C.

1.2234

D.

1.2267

The Chairman and members of the ACls Committee for Professionalism are ready to assist in resolving disputes through the ACIs Expert Determination Service in situations where:

A.

The amount of the deal exceeds EUR 5 million.

B.

The local regulator or central bank declines to intervene.

C.

Litigation has already commenced.

D.

At the request of one of the counterparties.