Question 1

What needs to be done in the event that a trade is amended by one or both parties?

Options :

A : A new confirmation should be generated and the confirmation cycle should restart and continue until the trade is completely matched by both parties.

B : A new confirmation should be generated by both parties but there is no need to restart the confirmation cycle.

C : A new confirmation need not be generated but the confirmation cycle must restart and continue until the trade is completely matched by both parties.

D : The amending party should verbally inform the other party.

Answer: A

Question 2

How can material divergences between the value of cash and collateral be managed in a documented sell/ buy-back?

Options :

A : Margin maintenance

B : Either of the above, but usually (b)

C : Either of the above, but usually (a)

D : Re-pricing

Answer: B

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?

Options :

A : unchanged

B : 10/8

C : 15/13

D : 6/4

Answer: C

Question 4

When a broker calls off" at the very instant a dealer "hits" the broker's price:"

Options :

A : The transaction should not be concluded.

B : The broker decides whether or not the deal is done.

C : ACI-s Committee for Professionalism will decide whether the transaction should be concluded.

D : The transaction should be concluded.

Answer: A

Question 5

What does the Model Code say concerning repos and stock-lending?

Options :

A : The exact maturity (end) dates for transactions must be agreed as soon as possible after a transaction.

B : All market participants should use the Modified Following Business Day Convention.

C : Legal documentation must be put in place as soon as possible after transaction.

D : All market participants should use the Modified Previous Business Day Convention.

Answer: B

Smartly Prepare Exam with Free Online 002-101 Practice Test

Buying Options: