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When using legal documentation proposed modifications:


A) Should be documented as soon as possible after a deal is done.
B) Should be clearly stated before a deal.
C) Can be agreed verbally.
D) Are not permissible.

E) B) and D)
F) A) and B)

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You sold a JPY 500,000,000 1x12 FRA at 0.35%. The settlement rate is 11-month (334-day) JPY LIBOR, which is fixed at 0.4450%. What is the settlement amount at maturity?


A) You pay JPY 440,694
B) You receive JPY 440,694
C) You pay JPY 438,882
D) You receive JPY 438,882

E) All of the above
F) B) and D)

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What does the Model Code advise regarding the taping of telephone conversations?


A) The tapes and other records should be kept until the transaction has been settled
B) Firms should ensure that they comply with local privacy laws
C) Management should ensure that the installation and control of recording equipment complies with local legislation, including laws on data protection, privacy and human rights as well as the manufacturers minimum requirements
D) All front office personnel should have access to these tapes and records

E) A) and D)
F) B) and D)

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Which of the following currencies is quoted on an ACT/360 basis in the money market?


A) SGD
B) PLN
C) GBP
D) NZD

E) All of the above
F) B) and C)

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If a 12-month AUD/NZD swap is quoted 53/47, which of the following statements would you consider to be correct?


A) 12-month AUD rates are higher than 12-month NZD rates
B) 12-month AUD rates are lower than 12-month NZD rates
C) Spot AUD/NZD will be higher by approximately 50 points in 12 months
D) The AUD yield curve is positive, whilst the NZD curve is negative

E) A) and D)
F) B) and C)

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Regarding access to production systems, which of the following is incorrect?


A) Profiles for functions are encouraged and should be reviewed semi-annually by a manager.
B) Developers should have unrestricted access to production systems.
C) Access to production systems should be rigorously controlled.
D) Users should not have access to change system functionalities.

E) B) and C)
F) A) and D)

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Your GBP/CHF rate is 1.3710-15. How many GBP would your customer have to give you to buy CHF 10,000,000.00?


A) 7,291,286.91
B) 7,293,946.02
C) 13,710,000.00
D) 13,715,000.00

E) C) and D)
F) B) and D)

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What is the purpose of a short straddle option strategy?


A) To anticipate lower volatility in the price of the underlying commodity
B) To anticipate moderately high volatility in the price of the underlying commodity
C) To anticipate increasing volatility in the price of the underlying commodity
D) To anticipate very high volatility in the price of the underlying commodity

E) B) and C)
F) A) and B)

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Which of the following may pay a return as a mix of income and capital/gain loss?


A) CD
B) Interbank deposit
C) Classic repo
D) Treasury bill

E) None of the above
F) A) and D)

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Basis risk on a futures contract is:


A) The risk of an adverse change in the futures price
B) The risk of an adverse change in the spread between futures and cash prices
C) The progressive illiquidity of a futures contract as it approaches expiry
D) The risk of a divergence between the futures price and the final fixing of the underlying interest rate

E) C) and D)
F) A) and B)

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What are 1MM dates?


A) the tenth of the following months: March, June, September and December
B) the third Wednesday of January, April, July and October
C) the Monday before the third Wednesday of March, June, September and December
D) the third Wednesday of March, June, September and December

E) A) and B)
F) A) and C)

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If spot NZD/CHF is quoted to you as 0.7406-09. How many NZD would you receive in exchange for CHF 5,000,000.00 if you dealt on the price?


A) 3,704,500.00
B) 6,748,549.06
C) 3,703,000.00
D) 6,751,282.74

E) B) and D)
F) B) and C)

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Which of the following are quoted in terms of a discount rate?


A) USTreasury bill
B) CD
C) Interbank deposit
D) ECP

E) B) and C)
F) All of the above

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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.

E) All of the above
F) A) and D)

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The Model Code rules that deals at non-current rates:


A) Are forbidden.
B) Require prior regulatory approval.
C) Require the prior express permission of the senior management of both counterparties.
D) Should be marked to market daily.

E) All of the above
F) B) and D)

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If EUR/USD is quoted to you as 1.1050-53, does this price represent?


A) The number of EUP per USD
B) The number of USD per EUR
C) Depends on whether the price is being quoted in Europe or the US
D) Depends on whether the price is being quoted interbank or to a customer

E) All of the above
F) B) and D)

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Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:


A) Will encourage clients to do more business.
B) Will help prevent potential litigation.
C) Will help banks sell sophisticated risk management solutions.
D) Is required by all regulators.

E) A) and B)
F) None of the above

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Management policy on the use of mobile devices by trading sales and settlement staff should:


A) Ban them from the dealing room or back office.
B) State whether they are allowed in the dealing room and back office, and can be used.
C) Ban their use in the dealing room or back office.
D) Restrict their use to senior management and authorised out-of-hours trading and sales staff.

E) None of the above
F) All of the above

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If the duration gap is zero, how will a small parallel shift in interest rates affect the market value of the bank's equity?


A) If interest rates rise, the market value of equity will increase
B) If interest rates rise, the market value of equity will decrease
C) The bank is immunised from changes in interest rates.
D) The market value of equity will decrease due to an increase in interest rates

E) A) and B)
F) A) and C)

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If I say that I have "bought and sold" EUR/USD in an FX swap, what have I done?


A) Bought EUR and sold USD spot, and sold FUR and bought USD forward
B) Bought EUR/USD spot and sold EUR/USD forward
C) Taken a EUR loan in exchange for making a USD loan with the same counterparly
D) All of the above

E) A) and B)
F) C) and D)

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