ACI 3I0-008 Exam Questions Instant Access

Question 1

The extension of forward FX contracts at their historic rates is only allowed when:

APrior management approval has been sought.

BThey are executed within six months.

CThey are extended for not more than one year.

DAll of the above.

Answer : A

Question 2

How can options he used to synthesise a short position in the underlying commodily?

AA short put option + long call option at the same strike price

BA long put option + short call option at the same strike price

CA short put option + short call option at the same strike price

DA long put option + long call option at the same strike price

Answer : B

Question 3

You bought USD 5,000,000 against EUR at 1.1037 and 3,000,000 at 1.1052. If the EUR/USD rate is now quoted 1.1015/17, and it you deal at that rate, what profitwould you make?

ANil

BA profit of EUR 16,847.58

CA loss

DA profit of EUR 18,166.05

Answer : B

Question 4

The delta of an at-the-money long call option is:

ABetween +0.5 and +1

B+0.5

CBetween 0 and +0.5

DZero

Answer : B

Question 5

Spot cable is quoted at 1.6048-53 in the brokers and you quote a customer 1.6050-55 in USD 3 million, If they sell USD to you, how much GSP will you be short of?

A4,816,500.00

B1,868,809.57

C1.868,576.77

D4,815,900.00

Answer : C

Question 6

What type of risk would describe the failure of a back office to make adequate margin calls on repo positions?

ACredit risk

BMarket risk

COperational risk

DSettlement risk

Answer : C

Question 7

The Interest Rate Parity Theorem states that:

AInterest rates in different currencies will tend to move into line with each other over time

BInterest rates in different currencies differ due to differences in expectations about inflation

CSelling a low interest rate currency to invest a high interest rate currency will only be profitable if one hedges the currency risk

DSelling a low interest rate currency to invest in a high interest rate currency should not be profitable if one hedges the currency risk

Answer : D

ACI Dealing Certificate 3I0-008 Exam Questions