002-101 Practice Online

Question 1

When an employee executes a personal trade in advance of a client's or institution's order to benefit from the anticipated movement in the market price following the execution of a large trade, it is called:

A : forward-facing

B :

insider dealing

C : front running

D : ex ante trading

Answer: C

Question 2

What is the effect of netting?

A : To reduce the size of the balance sheet

B :

To reduce the number and size of payments and transfers

C : All of the above

D : To reduce exposure to credit risk

Answer: C

Question 3

3-month USD/CHF is quoted at 12/10. Interest rates in Switzerland are reduced but USD rates (which are higher) are unchanged. What would you expect the 3-month forward USD/CHF rate to be?

A : unchanged

B : 10/8

C : 15/13

D : 6/4

Answer: C

Question 4

If the yield curve is upward sloping, a bank would not profit from:

A : borrowing long and lending short

B : borrowing short and lending long

C : paying a higher rate on deposits than the market

D : increasing the banks leverage

Answer: A

Question 5

Which of the following statements about Credit Default Swaps (CDS) is correct?

A : CDS provide protection against specified credit events to the party receiving the CDS premium payments.

B : CDS provide protection against the default of the trade counterparty that buys the CDS.

C : CDS provide compensation to the protection buyer, should a specified credit event occur to a third party entity.

D : CDS are used to recover funds from defaulted swap counterparties.

Answer: C

Name:	ACI Dealing Certificate New Version Exam
Exam Code:	002-101
Certification:	ACI Dealing Certificate
Vendor:	ACI
Total Questions:	420
Last Updated:	Apr 22, 2024

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