EMT Practice Test

1. Question Content...

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Question1: Click on the Exhibit Button to view the Formula Sheet. Basis risk on a futures contract is:

Question2: Click on the Exhibit Button to view the Formula Sheet. What is the Gold Offered Forward Rate?

Question3: Click on the Exhibit Button to view the Formula Sheet. A CD with a face value of USD 250 million was issued at par with a coupon of 5% for 91 days. You buy it in the secondary market when it has 30 days remaining to maturity and is trading at 5.25%. How much do you pay?

Question4: Click on the Exhibit Button to view the Formula Sheet. Which of the following statements is correct?

Question5: Click on the Exhibit Button to view the Formula Sheet. Gambling or betting amongst market participants has obvious dangers and:

Question6: Click on the Exhibit Button to view the Formula Sheet. Todays date is Thursday 12th December. What is the spot value date? Assume no bank holidays.

Question7: Click on the Exhibit Button to view the Formula Sheet. Eurodollar futures are:

Question8: Click on the Exhibit Button to view the Formula Sheet. A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

Question9: Click on the Exhibit Button to view the Formula Sheet. Deliberately inputting incorrect big figures into an electronic dealing platform is:

Question10: Click on the Exhibit Button to view the Formula Sheet. What does the Model Code say about the responsibility of a broker in handling suspicious transactions?

Question11: Click on the Exhibit Button to view the Formula Sheet. You are quoted the following market rates: spot EUR/CHF 1.1005 6M (180-day) EUR 3.45% 6M (180-day) CHF 1.25% What are the 6-month EUR/CHF forward points?

Question12: Click on the Exhibit Button to view the Formula Sheet. If EUR/USD is quoted to you as 1.1050-53, does this price represent?

Question13: Click on the Exhibit Button to view the Formula Sheet. Which of the following would not constitute an event of market disruption under the Model Code?

Question14: Click on the Exhibit Button to view the Formula Sheet. What is the Gold Offered Forward Rate?

Question15: Click on the Exhibit Button to view the Formula Sheet. What are the secondary market proceeds of a CD with a face value of EUR 5 million and a coupon of 3% that was issued at par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

Question16: Click on the Exhibit Button to view the Formula Sheet. To curb attempted fraud, banks should:

Question17: Click on the Exhibit Button to view the Formula Sheet. Half an hour ago you were made a price in USD/ CAD of 1.5250-55 and sold USD 10 million. The price is now 1.5232-37 and you square your position.
What is your profit or loss?

Question18: Click on the Exhibit Button to view the Formula Sheet. You have received a gift from a good friend who also happens to be your USD/YEN broker. Under such circumstances, the Model Code recommends that you should:

Question19: Click on the Exhibit Button to view the Formula Sheet. What is a Vostro account?

Question20: Click on the Exhibit Button to view the Formula Sheet. What is the buyers primary risk in a repo?

Question21: Click on the Exhibit Button to view the Formula Sheet. An option is:

Question22: Click on the Exhibit Button to view the Formula Sheet. What are IMM dates?

Question23: Click on the Exhibit Button to view the Formula Sheet. You are quoted the following market rates: spot EUR/CHF 1.1005 6M (180-day) EUR 3.45% 6M (180-day) CHF 1.25% What are the 6-month EUR/CHF forward points?

Question24: Click on the Exhibit Button to view the Formula Sheet. The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

Question25: Click on the Exhibit Button to view the Formula Sheet. Which of the following are transferable instruments?

Question26: Click on the Exhibit Button to view the Formula Sheet. You wish to sell a customer GBP/USD for value tomorrow. How can you hedge yourself?

Question27: Click on the Exhibit Button to view the Formula Sheet. What is the ISO code for the Lebanon pound?

Question28: Click on the Exhibit Button to view the Formula Sheet. A 3-month (91-day) deposit of EUR25 million is made at 3.25%. At maturity, it is rolled over three times at 3.55% for 90 days, 4.15% for 91 days and
4.19% for 89 days. At the end of 12 months, how much is repaid (principal plus interest)?

Question29: Click on the Exhibit Button to view the Formula Sheet. A 3-month (90-day) USD deposit is 5.5625% and 6- month (180-day) USD deposit is 5.75%. What is the 3x6 USD deposit rate?

Question30: Click on the Exhibit Button to view the Formula Sheet. Brokers should confirm all transactions:

Question31: Click on the Exhibit Button to view the Formula Sheet. When quoting the exchange rate between the EUR and AUD, which is conventionally the base currency?

Question32: Click on the Exhibit Button to view the Formula Sheet. If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

Question33: Click on the Exhibit Button to view the Formula Sheet. The use of standard settlement instructions (SSI's) is strongly encouraged because:

Question34: Click on the Exhibit Button to view the Formula Sheet. Banks have a fiduciary responsibility to ensure that clients have all necessary information to understand the transaction because this:

Question35: Click on the Exhibit Button to view the Formula Sheet. The Interest Rate Parity Theorem states that:

Question36: Click on the Exhibit Button to view the Formula Sheet. Bank B's price is shown by a broker

Question37: Click on the Exhibit Button to view the Formula Sheet. The spot/next repo rate for the 5% bund 2006 is quoted to you at 1.75-80%. You sell bonds with a market value of EUR 5,798,692 through a sell/buy-back.
The Repurchase Price is:

Question38: Click on the Exhibit Button to view the Formula Sheet. Extended trading hours and off-premises dealing can involve additional hazards, the avoidance of which requires clear controls. The Model Code prescribes best market practice. Which of the following is true?

Question39: Click on the Exhibit Button to view the Formula Sheet. What is the Gold Offered Forward Rate?

Question40: Click on the Exhibit Button to view the Formula Sheet. In case of a default on a repo by the seller:

Question41: Click on the Exhibit Button to view the Formula Sheet. What is the effect of netting?

Question42: Click on the Exhibit Button to view the Formula Sheet. When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:

Question43: Click on the Exhibit Button to view the Formula Sheet. Bank participants have a duty to make it clear that their prices are firm or merely indicative:

Question44: Click on the Exhibit Button to view the Formula Sheet. When dealing with customers, financial market professionals are advised by the Model Code to clarify that all transactions are entered into solely at each partys risk by explicitly agreeing in writing that:

Question45: Click on the Exhibit Button to view the Formula Sheet. Today is Monday, 8th December. You sell a 9x12 FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?

Question46: Click on the Exhibit Button to view the Formula Sheet. What is the Overnight Index for GBP?

Question47: Click on the Exhibit Button to view the Formula Sheet. A bank that has quoted a firm price is obliged to deal:

Question48: Click on the Exhibit Button to view the Formula Sheet. Selling a FRA is the same as:

Question49: Click on the Exhibit Button to view the Formula Sheet. If a 6-month AUD/NZD swap is quoted 173/165, which of the following statements would you consider to be correct?

Question50: Click on the Exhibit Button to view the Formula Sheet. One of your brokers asks you to buy and sell EUR/ USD at the same price net of brokerage in order to allow him to clear a transaction.

Question51: Click on the Exhibit Button to view the Formula Sheet. In all dealing conversations, the Model Code strongly recommends:

Question52: Click on the Exhibit Button to view the Formula Sheet. What is EONIA?

Question53: Click on the Exhibit Button to view the Formula Sheet. What is the purpose of an initial margin on a futures exchange?

Question54: Click on the Exhibit Button to view the Formula Sheet. Using the following rates: spot GBP/CHF 2.3785-15 spot CHF/SEK 5.5975-85 3M GBP/SEK swap 725/690 What is the price for 3-month outright GBP/SEK?

Question55: Click on the Exhibit Button to view the Formula Sheet. The Model Code rules that deals at non-current rates:

Question56: Click on the Exhibit Button to view the Formula Sheet. Deals transacted direct or via a broker prior to
5:00am Sydney time on Monday morning:

Question57: Click on the Exhibit Button to view the Formula Sheet. The delta of an option is:

Question58: Click on the Exhibit Button to view the Formula Sheet. 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 if you deal at that rate, what profit would you make?

Question59: Click on the Exhibit Button to view the Formula Sheet. Which of the following is true?

Question60: Click on the Exhibit Button to view the Formula Sheet. Brokers shall not reveal the identity of a counterparty unless:

Question61: Click on the Exhibit Button to view the Formula Sheet. Where repos or securities lending transactions are entered into, the Model Code recommends:

Question62: Click on the Exhibit Button to view the Formula Sheet. The Committee for Professionalism strongly recommends intra-day oral deal checks to help reduce the number and size of differences, particularly when dealing through voice- brokers, for deals involving foreign counterparties, in faster moving markets such as FX and when dealing in other instruments which have very short settlement periods. This checking should:

Question63: Click on the Exhibit Button to view the Formula Sheet. What is the maximum maturity of a London CD?

Question64: Click on the Exhibit Button to view the Formula Sheet. How can material divergences between the value of cash and collateral be managed in a documented sell/buy-back?

Question65: Click on the Exhibit Button to view the Formula Sheet. Which of the following is true?

Question66: Click on the Exhibit Button to view the Formula Sheet. 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 GBP will you be short of?

Question67: Click on the Exhibit Button to view the Formula Sheet. When is interest conventionally due on a 3-year interbank eurodollar deposit?

Question68: Click on the Exhibit Button to view the Formula Sheet. Today is Monday, 8th December. You sell a 9x12 FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?

Question69: Click on the Exhibit Button to view the Formula Sheet. A customer asks for a price in 3- month CHF/JPY.
You quote 56/54. The customer deals at 54. What have you done?

Question70: Click on the Exhibit Button to view the Formula Sheet. A 3-month (91-day) deposit of EUR25 million is made at 3.25%. At maturity, it is rolled over three times at 3.55% for 90 days, 4.15% for 91 days and
4.19% for 89 days. At the end of 12 months, how much is repaid (principal plus interest)?

Question71: Click on the Exhibit Button to view the Formula Sheet. A disgruntled customer claims that he should not have to settle an FRA with you because it is really just a wager. What type of risk are you exposed to?

Question72: Click on the Exhibit Button to view the Formula Sheet. You are quoted the following market rates: spot USD/JPY 123.65 1M (30-day) USD. 2.15% 1M (30-day) JPY 0.10% What is 1-month USD/JPY?

Question73: Click on the Exhibit Button to view the Formula Sheet. If the value date of forward USD/JPY transactions is declared a holiday in either New York or Tokyo, the correct value date will be:

Question74: Click on the Exhibit Button to view the Formula Sheet. Where repos or securities lending transactions are entered into, the Model Code recommends:

Question75: Click on the Exhibit Button to view the Formula Sheet. Confirmations should be sent out by both counterparties through an efficient and secure means of communication, preferably electronic:

Question76: Click on the Exhibit Button to view the Formula Sheet. An option contract that gives the buyer the right to exercise the option at several distinct points during its life is called:

Question77: Click on the Exhibit Button to view the Formula Sheet. When a stop-loss/profit order is taken, the rate specified in the order:

Question78: Click on the Exhibit Button to view the Formula Sheet. Confirmations must be sent out:

Question79: Click on the Exhibit Button to view the Formula Sheet. It is now permissible in most markets for brokers to be owned by banks and other principals. Where there is shared management, or a shareholding or other investment in a broker by a counterparty:

Question80: Click on the Exhibit Button to view the Formula Sheet. You have a USD loan that is priced at 3-month LIBOR+50. LIBOR for the loan will be re- fixed in exactly one month. The market is quoting:

Question81: Click on the Exhibit Button to view the Formula Sheet. What is the primary function of GC repo, particularly very short -term transactions?

Question82: Click on the Exhibit Button to view the Formula Sheet. You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that:

Question83: Click on the Exhibit Button to view the Formula Sheet. Which of the following is not true?

Question84: Click on the Exhibit Button to view the Formula Sheet. A broker offers a dealer an incentive in the form of a reduction to the agreed schedule of brokerage between the firms.

Question85: Click on the Exhibit Button to view the Formula Sheet. Which of the following statements reflects the Model Code on gambling or betting amongst market participants?

Question86: Click on the Exhibit Button to view the Formula Sheet. Extended trading hours and off-premises dealing can involve additional hazards, the avoidance of which requires clear controls. The Model Code prescribes best market practice. Which of the following is true?

Question87: Click on the Exhibit Button to view the Formula Sheet. Cable is quoted at 1.6075-80 and you say "5 yours!" to the broker. What have you done?

Question88: Click on the Exhibit Button to view the Formula Sheet. If a dealer has interest on one side, and the other side is dealt away, the broker should:

Question89: Click on the Exhibit Button to view the Formula Sheet. Where answerphone equipment is used for reporting and recording of off-premises transactions, it should be:

Question90: Click on the Exhibit Button to view the Formula Sheet. When you are accepting a stop loss order, you must:

Question91: Click on the Exhibit Button to view the Formula Sheet. A customer gives you GBP 25 million at 6.625% same day for 7 days. Through a broker, you place the funds with a bank for the same period at 6.6875%.
Brokerage is charged at 2 basis points per annum. What is the net profit or loss on the deal?

Question92: Click on the Exhibit Button to view the Formula Sheet. The market is quoting: 1-month (31-day) USD.
1.75% 3-month (91-day) USD. 2.05% What is the 1x3 rate in USD?

Question93: Click on the Exhibit Button to view the Formula Sheet. A dealer has indicated his intention of assigning an interest rate swap to a third party soon after transacting that swap. When about to execute an assignment:

Question94: Click on the Exhibit Button to view the Formula Sheet. Under which circumstances are banks allowed to park positions with a counterparty?:

Question95: Click on the Exhibit Button to view the Formula Sheet. Bank A pays for EURO 5 m at 1.1592. Bank B offers EURO 10 m at 1.1597. Broker XYZ quotes to the market EURO / USD 1.1592/97. Bank C takes the offer at 97. The broker is obliged to reveal:

Question96: Click on the Exhibit Button to view the Formula Sheet. From the following GBP deposit rates: 1M (31-day) GBP deposits3.15% 2M (61-day) GBP deposits3.25% 3M (91-day) GBP deposits3.41% 4M (120-day) GBP deposits3.56% 5M (152-day) GBP deposits3.73% 6M (182-day) GBP deposits3.90% calculate the
3x4 forward-forward rate.

Question97: Click on the Exhibit Button to view the Formula Sheet. Confirmations should be sent out by both counterparties through an efficient and secure means of communication, preferably electronic:

Question98: Click on the Exhibit Button to view the Formula Sheet. When dealing with a fund manager, who will allocate shares in a transaction to his unknown clients after the transaction has been executed with you, you should:

Question99: Click on the Exhibit Button to view the Formula Sheet. The Interest Rate Parity Theorem states that:

Question100: Click on the Exhibit Button to view the Formula Sheet. What is the risk of dealing through an agent with an unknown principal?

Question101: Click on the Exhibit Button to view the Formula Sheet. A forward-forward loan creates an exposure to the risk of:

Question102: Click on the Exhibit Button to view the Formula Sheet. Are the forward points materially affected by changes in the spot rate?

Question103: Click on the Exhibit Button to view the Formula Sheet. 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?

Question104: Click on the Exhibit Button to view the Formula Sheet. What is the purpose of an initial margin on a futures exchange?

Question105: Click on the Exhibit Button to view the Formula Sheet. You are quoted the following market rates: spot USD/JPY 123.65 1M (30-day) USD. 2.15% 1M (30-day) JPY 0.10% What is 1-month USD/JPY?

Question106: Click on the Exhibit Button to view the Formula Sheet. Which of the following is sometimes called two- name paper?

Question107: Click on the Exhibit Button to view the Formula Sheet. How can options be used to synthesise a short position in the underlying commodity?

Question108: Click on the Exhibit Button to view the Formula Sheet. If GBP/USD is 1.5350-53 and USD/JPY is 106.50-
53, what is GBP/JPY ?

Question109: Click on the Exhibit Button to view the Formula Sheet. The Model Code is unequivocal on " position parking". What does it say?

Question110: Click on the Exhibit Button to view the Formula Sheet. An option is:

Question111: Click on the Exhibit Button to view the Formula Sheet. A customer based in the UK exports automotive parts to the US. His main competitor is in France? What type of exposure to currency risk is posed by movements in EUR/USD?

Question112: Click on the Exhibit Button to view the Formula Sheet. At the end of the day you are short EUR 10 million against GBP at 0.6712. You are asked to revalue your position at a EUR/GBP rate of 0.6729. What is the resulting profit or loss?

Question113: Click on the Exhibit Button to view the Formula Sheet. From the following GBP deposit rates: 1M (31-day) GBP deposits3.15% 2M (61-day) GBP deposits3.25% 3M (91-day) GBP deposits3.41% 4M (120-day) GBP deposits3.56% 5M (152-day) GBP deposits3.73% 6M (182-day) GBP deposits3.90% calculate the
3x4 forward-forward rate.

Question114: Click on the Exhibit Button to view the Formula Sheet. Cable is quoted at 1.6075-80 and you say "5 yours!" to the broker. What have you done?

Question115: Click on the Exhibit Button to view the Formula Sheet. When a broker makes an error on payment instructions The Model Code recommends that:

Question116: Click on the Exhibit Button to view the Formula Sheet. The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75-80%. As collateral, you are offered EUR25 million nominal of the 5.5% OAT April 2006, which is worth EUR 28,137,500. If you impose an initial margin of 1%, the Repurchase Price is:

Question117: Click on the Exhibit Button to view the Formula Sheet. What is the maximum maturity of a US Treasury bill?

Question118: Click on the Exhibit Button to view the Formula Sheet. What is the probability of an at-the- money option being exercised?

Question119: Click on the Exhibit Button to view the Formula Sheet. The organisational structure of market participants should ensure a strict segregation between front and back office of:

Question120: Click on the Exhibit Button to view the Formula Sheet. What type of institution is the typical issuer of bank bills?

Question121: Click on the Exhibit Button to view the Formula Sheet. A broker can consider a deal as done if:

Question122: Click on the Exhibit Button to view the Formula Sheet. An option premium is a positive function of:

Question123: Click on the Exhibit Button to view the Formula Sheet. Which of the following rates represents the highest investment yield in the euromarket?

Question124: Click on the Exhibit Button to view the Formula Sheet. How could your firm avoid the risks of dealing through an agent with an unknown principal?

Question125: Click on the Exhibit Button to view the Formula Sheet. In the international market, a FRA in USD is usually settled with reference to:

Question126: Click on the Exhibit Button to view the Formula Sheet. What is an FX swap?

Question127: Click on the Exhibit Button to view the Formula Sheet. An Overnight Indexed Swap is:

Question128: Click on the Exhibit Button to view the Formula Sheet. A 6-month SEK/NOK Swap is quoted 140/150. Spot is 0.9445. Which of the following statements is correct?

Question129: Click on the Exhibit Button to view the Formula Sheet. What type of risk would describe the failure of a back office to make adequate margin calls on repo positions?

Question130: Click on the Exhibit Button to view the Formula Sheet. Payment and settlement instructions should be passed:

Question131: Click on the Exhibit Button to view the Formula Sheet. What is a Vostro account?

Question132: Click on the Exhibit Button to view the Formula Sheet. What is settlement risk in FX?

Question133: Click on the Exhibit Button to view the Formula Sheet. A forward-forward loan creates an exposure to the risk of:

Question134: Click on the Exhibit Button to view the Formula Sheet. What is the ISO code for the currency of Hungary?

Question135: Click on the Exhibit Button to view the Formula Sheet. If spot AUD/USD is quoted to you as 0.7406-09.
How many AUD would you receive in exchange for USD 5,000,000 if you dealt on the price?

Question136: Click on the Exhibit Button to view the Formula Sheet. For which of the following reasons is the extension of forward contracts at non-current rates is discouraged: i.These could be used to conceal profit or losses.
ii.These could be used to perpetrate fraud. iii.These could result in an unauthorised extension of credit.
iv.These could result in confusing settlement instructions.

Question137: Click on the Exhibit Button to view the Formula Sheet. Where internet trading facilities are established by a bank for a client, the conditions and controls should be stated in a rulebook produced by:

Question138: Click on the Exhibit Button to view the Formula Sheet. In spite of having agreed to a deal, dealers are not bound to the deal if it is subject to documentation. The Model Code:

Question139: Click on the Exhibit Button to view the Formula Sheet. Which type of repo is the least risky for the buyer?

Question140: Click on the Exhibit Button to view the Formula Sheet. What usually happens to the collateral in a tri-party repo?

Question141: Click on the Exhibit Button to view the Formula Sheet. Bank B's price is shown by a broker

Question142: Click on the Exhibit Button to view the Formula Sheet. Which of the following are quoted in terms of a yield-to-maturity?

Question143: Click on the Exhibit Button to view the Formula Sheet. Brokers shall not reveal the identity of a counterparty unless:

Question144: Click on the Exhibit Button to view the Formula Sheet. You have received a gift from a good friend who also happens to be your USD/YEN broker. Under such circumstances, the Model Code recommends that you should:

Question145: Click on the Exhibit Button to view the Formula Sheet. Which of the following are transferable instruments?

Question146: Click on the Exhibit Button to view the Formula Sheet. 3-month USD/CHF is quoted at 112/110. 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?

Question147: Click on the Exhibit Button to view the Formula Sheet. What is an FX swap?

Question148: Click on the Exhibit Button to view the Formula Sheet. A 7-day piece of USCP is quoted at a rate of discount of 1.75%. What is its true yield?

Question149: Click on the Exhibit Button to view the Formula Sheet. If GBP/USD is quoted to you at 1.6120-30, how much GBP would you receive if you sold USD 2,000,000 ?

Question150: Click on the Exhibit Button to view the Formula Sheet. Which of the following is always a secured instrument?

Question151: Click on the Exhibit Button to view the Formula Sheet. You deal over the phone with a counterparty. The subsequent confirmation differs from the terms agreed verbally. What is the result?

Question152: Click on the Exhibit Button to view the Formula Sheet. Convert 8.25% quoted on a semi- annually compounded money market basis for USD to the equivalent annually- compounded bond basis.

Question153: Click on the Exhibit Button to view the Formula Sheet. A bond is trading 50 basis points special for 1 week, while the 1-week GC repo rate is 3.25%. If you held GBP 10,500,000 of this bond, what would be the cost of borrowing against it in the repo market?

Question154: Click on the Exhibit Button to view the Formula Sheet. A futures clearing house is:

Question155: Click on the Exhibit Button to view the Formula Sheet. An option contract that gives the buyer the right to exercise the option at the average of the prices of the underlying during its life is called:

Question156: Click on the Exhibit Button to view the Formula Sheet. A 1-month (30-day) USCP with a face value of USD
5 million is quoted at a rate of discount of 2.31%. How much is the paper worth?

Question157: Click on the Exhibit Button to view the Formula Sheet. Automatic trading systems for interbank spot FX display the best prices entered into the systems by users and:

Question158: Click on the Exhibit Button to view the Formula Sheet. An at-the-money call option:

Question159: Click on the Exhibit Button to view the Formula Sheet. You are short of 6 Dec eurodollar futures contracts at 98.10. Yesterday, the closing price was 98.15. Todays closing price is 97.905. What variation margin will be due?

Question160: Click on the Exhibit Button to view the Formula Sheet. A dealer does the following deals in EUR/USD: buys EUR 1 m at 1.1020 sells EUR 3 m at 1.1022 buys EUR 2 m at 1.1002 buys EUR 1.5 m at 1.1012 What position does the dealer now have?

Question161: Click on the Exhibit Button to view the Formula Sheet. In the unforeseen event that a particular maturity date is declared a public holiday, what is normal market practice for spot FX? :

Question162: Click on the Exhibit Button to view the Formula Sheet. Dealers should not conduct dealing activities outside the bank unless:

Question163: Click on the Exhibit Button to view the Formula Sheet. 3-month EUR/USD FX swaps are quoted to you at
15/19. If the "points are in your favour", what have you done?

Question164: Click on the Exhibit Button to view the Formula Sheet. Todays date is Thursday 12th December. What is the spot value date? Assume no bank holidays.

Question165: Click on the Exhibit Button to view the Formula Sheet. The two-week repo rate for the 5.25% bund 2007 is quoted to you at 3.33-38%. You agree to reverse in bonds worth EUR 266,125,000 with no initial margin.
You would earn repo interest of:

Question166: Click on the Exhibit Button to view the Formula Sheet. Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

Question167: Click on the Exhibit Button to view the Formula Sheet. What is the purpose of a long strangle option strategy?

Question168: Click on the Exhibit Button to view the Formula Sheet. Fraud is typically classified as:

Question169: Click on the Exhibit Button to view the Formula Sheet. You have done the following deals in spot USD/ JPY: Sold USD 5.0 million at 130.60 Bought USD 3.5 million at 130.20 Bought USD 2.0 million at 130.50 Sold USD 2.0 million at 130.55 What is your net position and average rate?

Question170: Click on the Exhibit Button to view the Formula Sheet. A person who appears to be a technician asks for your help in accessing treasury systems as he has forgotten his list of access codes. The Model Code recommends:

Question171: Click on the Exhibit Button to view the Formula Sheet. Where dealing through an intermediary with an unidentified principal, the Model Code recommends:

Question172: Click on the Exhibit Button to view the Formula Sheet. What is replacement cost a function of?

Question173: Click on the Exhibit Button to view the Formula Sheet. Voice-brokers in spot FX act as:

Question174: Click on the Exhibit Button to view the Formula Sheet. A CD with a face value of EUR10 million and a coupon of 3% was issued at par for 182 days and is now trading at 3.10% with 120 days remaining to maturity. What has been the capital gain or loss since issue?

Question175: Click on the Exhibit Button to view the Formula Sheet. The Chairman and members of the ACIs Committee for Professionalism are ready to assist in resolving disputes through the ACIs Expert Determination Service in situations where:

Question176: Click on the Exhibit Button to view the Formula Sheet. What is a master agreement intended to do?

Question177: Click on the Exhibit Button to view the Formula Sheet. The term "under reference" refers to:

Question178: Click on the Exhibit Button to view the Formula Sheet. If 6-month EUR/AUD is quoted at 29/32, which of the following statements is correct?

Question179: Click on the Exhibit Button to view the Formula Sheet. EURIBOR is the:

Question180: Click on the Exhibit Button to view the Formula Sheet. 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?

Question181: Click on the Exhibit Button to view the Formula Sheet. A dealer needs to buy USD against SGD. Of the following rates quoted to him, which is the best rate for him?

Question182: Click on the Exhibit Button to view the Formula Sheet. The Model Code strongly recommends that intra- day oral deal checks should:

Question183: Click on the Exhibit Button to view the Formula Sheet. Bank XYZ calls you for a quote in EUR/USD for EURO 20 million. If you decide to quote to Bank XYZ:

Question184: Click on the Exhibit Button to view the Formula Sheet. What does the Model Code say about netting?

Question185: Click on the Exhibit Button to view the Formula Sheet. You hear from several counterparties that a major market participant has taken major losses on long USD/JPY positions. You know the reports are untrue, as you have in fact bought large amounts of USD/JPY from that very firm, which means that the impact of the reports on the market would be helpful to your position.

Question186: Click on the Exhibit Button to view the Formula Sheet. A customer sells a LIFFE Euro Swiss futures contract. Which of the following risks could he be trying to hedge?

Question187: Click on the Exhibit Button to view the Formula Sheet. If spot GBP/CHF is quoted 2.3875- 80 and the 3- month forward outright is 2.3660-70, what are the forward points?

Question188: Click on the Exhibit Button to view the Formula Sheet. The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:

Question189: Click on the Exhibit Button to view the Formula Sheet. What is Model Codes recommendation on the settlement of differences by "points"?

Question190: Click on the Exhibit Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6- month LIBOR for the next payment date is fixed today at 4.95%. How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

Question191: Click on the Exhibit Button to view the Formula Sheet. Deliberately inputting incorrect big figures into an electronic dealing platform is:

Question192: Click on the Exhibit Button to view the Formula Sheet. You have quoted a Swiss customer spot USD/CHF as 1.3710-15, but he asks you to quote it as CHF/USD. What do you quote

Question193: Click on the Exhibit Button to view the Formula Sheet. Which type of repo is the least risky for the buyer?

Question194: Click on the Exhibit Button to view the Formula Sheet. You are quoted spot NZD/USD 0.6821-28 and USD/ CHF 1.4652-56, at what price can you buy CHF against NZD?

Question195: Click on the Exhibit Button to view the Formula Sheet. The use of mobile phones from within the dealing room for transacting business:

Question196: Click on the Exhibit Button to view the Formula Sheet. If you sell USD 3-month forward to a client against EUR, what should you do to hedge your position?

Question197: Click on the Exhibit Button to view the Formula Sheet. A CD with a face value of USD50 million and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

Question198: Click on the Exhibit Button to view the Formula Sheet. A CD with a face value of USD50 million and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

Question199: Click on the Exhibit Button to view the Formula Sheet. How much is a big figure worth per million of base currency if EUR/GBP is 0.6990?

Question200: Click on the Exhibit Button to view the Formula Sheet. Where the matter of dealing for personal account is concerned, the Model Code recommends that:

Question201: Click on the Exhibit Button to view the Formula Sheet. What is a long straddle option strategy?

Question202: Click on the Exhibit Button to view the Formula Sheet. What is the day count/annual basis convention for euroyen deposits?

Question203: Click on the Exhibit Button to view the Formula Sheet. What is meant by "short dates"?

Question204: Click on the Exhibit Button to view the Formula Sheet. 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?

Question205: Click on the Exhibit Button to view the Formula Sheet. Under the Model Code, if a broker shouts "done" or
"mine" at the very moment a dealer shouts "off":

Question206: Click on the Exhibit Button to view the Formula Sheet. You have done the following deals in spot USD/ JPY: Sold USD 5.0 million at 111.60 Bought USD 3.5 million at 111.20 Bought USD 2.0 million at 111.50 Sold USD 2.0 million at 111.55 What position do you now have?

Question207: Click on the Exhibit Button to view the Formula Sheet. If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

Question208: Click on the Exhibit Button to view the Formula Sheet. The intrinsic value of a long call option:

Question209: Click on the Exhibit Button to view the Formula Sheet. What is an outright forward FX transaction?

Question210: Click on the Exhibit Button to view the Formula Sheet. A 12-month EUR/USD swap is quoted at 241/244.
EUR interest rates are expected to fall, with USD interest rates (which are higher) remaining stable.
Assuming no change in the spot rate what effect would you expect on the forward points?

Question211: Click on the Exhibit Button to view the Formula Sheet. An option premium is a positive function of:

Question212: Click on the Exhibit Button to view the Formula Sheet. The use of off-market rates is discouraged and should be permitted only:

Question213: Click on the Exhibit Button to view the Formula Sheet. An interest rate swap is:

Question214: Click on the Exhibit Button to view the Formula Sheet. Automatic trading systems for interbank spot FX display the best prices entered into the systems by users and:

Question215: Click on the Exhibit Button to view the Formula Sheet. Borrowing USD for 12 months and lending them for
6 months (means that you are making):

Question216: Click on the Exhibit Button to view the Formula Sheet. A 6-month SEK/NOK Swap is quoted 140/150. Spot is 0.9445. Which of the following statements is correct?

Question217: Click on the Exhibit Button to view the Formula Sheet. For which of the following reasons is the extension of forward contracts at non-current rates is discouraged: i.These could be used to conceal profit or losses.
ii.These could be used to perpetrate fraud. iii.These could result in an unauthorised extension of credit.
iv.These could result in confusing settlement instructions.

Question218: Click on the Exhibit Button to view the Formula Sheet. How can material divergences between the value of cash and collateral be managed in a documented sell/buy-back?

Question219: Click on the Exhibit Button to view the Formula Sheet. You deal over the phone with a counterparty. The subsequent confirmation differs from the terms agreed verbally. What is the result?

Question220: Click on the Exhibit Button to view the Formula Sheet. Market participants should, where activity justifies it, aim to reduce settlement and related credit risk on currency transactions by:

Question221: Click on the Exhibit Button to view the Formula Sheet. A customer sells a LIFFE Euro Swiss futures contract. Which of the following risks could he be trying to hedge?

Question222: Click on the Exhibit Button to view the Formula Sheet. A futures clearing house is:

Question223: Click on the Exhibit Button to view the Formula Sheet. Written confirmation is a function that can be done by:

Question224: Click on the Exhibit Button to view the Formula Sheet. Where internet trading facilities are established by a bank for a client, the conditions and controls should be stated in a rulebook produced by:

Question225: Click on the Exhibit Button to view the Formula Sheet. If the value date of forward USD/JPY transactions is declared a holiday in either New York or Tokyo, the correct value date will be:

Question226: Click on the Exhibit Button to view the Formula Sheet. Which of the following is true?

Question227: Click on the Exhibit Button to view the Formula Sheet. Convert 8.25% quoted on a semi- annually compounded money market basis for USD to the equivalent annually- compounded bond basis.

Question228: Click on the Exhibit Button to view the Formula Sheet. Basis risk on a futures contract is:

Question229: Click on the Exhibit Button to view the Formula Sheet. If you bought USD 2,000,000 against CHF at
1.1020, USD 3,000,000 at 1.1040 and USD 5,000,000 at 1.1032, what is the average rate of your position?

Question230: Click on the Exhibit Button to view the Formula Sheet. What are the secondary market proceeds of a CD with a face value of EUR 5 million and a coupon of 3% that was issued at par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

Question231: Click on the Exhibit Button to view the Formula Sheet. An option contract that gives the buyer the right to exercise the option at the average of the prices of the underlying during its life is called:

Question232: Click on the Exhibit Button to view the Formula Sheet. Lending for 3 months and borrowing for 6 months creates a 3x6 forward-forward deposit. The cost of that deposit is called:

Question233: Click on the Exhibit Button to view the Formula Sheet. Your are quoted the following rates: spot CHF/JPY
80.12-22 3M CHF/JPY 25.5/22.5 At what rate can you buy 3-month outright JPY against CHF?

Question234: Click on the Exhibit Button to view the Formula Sheet. Gambling or betting amongst market participants has obvious dangers and:

Question235: Click on the Exhibit Button to view the Formula Sheet. Fraud is typically classified as:

Question236: Click on the Exhibit Button to view the Formula Sheet. If I say that I have "bought and sold" EUR/USD in an FX swap, what have I done?

Question237: Click on the Exhibit Button to view the Formula Sheet. The extension of forward FX contracts at their historic rates is only allowed when:

Question238: Click on the Exhibit Button to view the Formula Sheet. Which of the following is issued by auction?

Question239: Click on the Exhibit Button to view the Formula Sheet. It is up to the vendors of electronic dealing platforms to ensure that dealers are trained to use their systems.

Question240: Click on the Exhibit Button to view the Formula Sheet. If EUR/USD is 1.1025-28 and the 6- month swap is
112.50/113, what is the 6-month outright price?

Question241: Click on the Exhibit Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6- month LIBOR for the next payment date is fixed today at 4.95%. How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

Question242: Click on the Exhibit Button to view the Formula Sheet. You have written a EUR/USD knock- in option for a bank counterparty. At 6pm New York time on Friday, the instrike point is breached. This is confirmed on screens. The counterparty contacts you to confirm that the option has been knocked in.

Question243: Click on the Exhibit Button to view the Formula Sheet. When is a broker allowed to assume a deal is closed:

Question244: Click on the Exhibit Button to view the Formula Sheet. Management policy on the use of mobile devices by trading, sales and settlement staff should:

Question245: Click on the Exhibit Button to view the Formula Sheet. In GBP/CHF, you are quoted the following prices by four different banks. You are a buyer of CHF. Which is the best quote for you?

Question246: Click on the Exhibit Button to view the Formula Sheet. 3-month EUR/USD FX swaps are quoted to you at
15/19. If the "points are in your favour", what have you done?

Question247: Click on the Exhibit Button to view the Formula Sheet. You quote the following rates to a customer: spot GBP/CHF 2.2005-10 3M GBP/CHF swap 120/115 At what rate do you sell GBP to a customer 3-month outright?

Question248: Click on the Exhibit Button to view the Formula Sheet. How can options be used to synthesise a short position in the underlying commodity?

Question249: Click on the Exhibit Button to view the Formula Sheet. Purchasing a USD/JPY call option is equivalent to:

Question250: Click on the Exhibit Button to view the Formula Sheet. You hear from a client of good standing that a major market participant has taken major losses on its proprietary trading book and is desperate for liquidity. You are not convinced that the story is true, but have a friend at another bank who you know has very large exposures to this firm and would be seriously damaged by a default. What advice does the Model Code give?

Question251: Click on the Exhibit Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6- month LIBOR for the next payment date is fixed today at 4.95%. You expect 6-month LIBOR in 6 months to fix at 5.25%, in 12 months at 5.35% and in 18 months at 5.40%. What do you expect the net settlement amounts to be over the next 2 years? Assume 30-day months.

Question252: Click on the Exhibit Button to view the Formula Sheet. Dealers are allowed to trade for their own account if:

Question253: Click on the Exhibit Button to view the Formula Sheet. Which of the following statements is true?

Question254: Click on the Exhibit Button to view the Formula Sheet. Bank A pays for EURO 5 m at 1.1592. Bank B offers EURO 10 m at 1.1597. Broker XYZ quotes to the market EURO / USD 1.1592/97. Bank C takes the offer at 97. The broker is obliged to reveal:

Question255: Click on the Exhibit Button to view the Formula Sheet. In a dispute between the dealer and a broker, the Model Code recommends that this should be referred in the first instance to:

Question256: Click on the Exhibit Button to view the Formula Sheet. The Model Code recommends that when banks accept a stop-loss order:

Question257: Click on the Exhibit Button to view the Formula Sheet. If you buy GBP 2,000,000 against USD at 1.6020; GBP 1,000,000 at 1.6035 and GBP 3,000,000 at 1.6028, what is the average rate of your position?

Question258: Click on the Exhibit Button to view the Formula Sheet. If you funded a fixed-income investment portfolio with short-term deposits, how would you hedge your interest rate exposure with interest rate swaps?

Question259: Click on the Exhibit Button to view the Formula Sheet. A dealer has been asked by a broker to go to an exclusive club for the third time in a week. He should:

Question260: Click on the Exhibit Button to view the Formula Sheet. If a broker refers to "the payer of 5- year euro at
4.12", what is this party doing?

Question261: Click on the Exhibit Button to view the Formula Sheet. The Model Code recommends that, in the case of complaints about transactions, management should:

Question262: Click on the Exhibit Button to view the Formula Sheet. To curb attempted fraud, banks should:

Question263: Click on the Exhibit Button to view the Formula Sheet. What is the value date of a 6-month outright forward FX transaction dealt today, if todays spot date is Monday, 30 th June? Assume there are no bank holidays.

Question264: Click on the Exhibit Button to view the Formula Sheet. When a broker calls "off" at the very instant a dealer
"hits" the broker's price:

Question265: Click on the Exhibit Button to view the Formula Sheet. Which of the following is not in the Model Code?

Question266: Click on the Exhibit Button to view the Formula Sheet. You and a dealer at another bank have an informal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. The Model Code states that:

Question267: Click on the Exhibit Button to view the Formula Sheet. A 6-month (182-day) investment of CHF15.5 million yields a return of CHF100,000. What is the rate of return?

Question268: Click on the Exhibit Button to view the Formula Sheet. If a broker refers to "the payer of 5- year euro at
4.12", what is this party doing?

Question269: Click on the Exhibit Button to view the Formula Sheet. The forward points are calculated from:

Question270: Click on the Exhibit Button to view the Formula Sheet. You quote a price to a broker on EUR 100 million.
Your price is hit for EUR 50 million. What does the Model Code say about this situation?

Question271: Click on the Exhibit Button to view the Formula Sheet. The delta of an at-the-money long call option is:

Question272: Click on the Exhibit Button to view the Formula Sheet. What are the secondary market proceeds of a CD with a face value of EUR 5 million and a coupon of 3% that was issued at par for 182 days and is now trading at 3% but with only 7 days remaining to maturity?

Question273: Click on the Exhibit Button to view the Formula Sheet. 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?

Question274: Click on the Exhibit Button to view the Formula Sheet. A 7% CD was issued recently, at par, which you now purchase at 6.75%. You would expect to pay:

Question275: Click on the Exhibit Button to view the Formula Sheet. Where the matter of dealing for personal account is concerned, the Model Code recommends that:

Question276: Click on the Exhibit Button to view the Formula Sheet. How long does the Model Code recommend that tape recordings of dealers/brokers should be kept?

Question277: Click on the Exhibit Button to view the Formula Sheet. Making interest rate swap transactions subject to agreement on documentation:

Question278: Click on the Exhibit Button to view the Formula Sheet. The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75-80%. As collateral, you are offered EUR25 million nominal of the 5.5% OAT April 2006, which is worth EUR 28,137,500. If you impose an initial margin of 1%, the Repurchase Price is:

Question279: Click on the Exhibit Button to view the Formula Sheet. How are Overnight Indexed Swaps settled?

Question280: Click on the Exhibit Button to view the Formula Sheet. The one-month (31-day) GC repo rate for French government bonds is quoted to you at 3.75-80%. As collateral, you are offered EUR25 million nominal of the 5.5% OAT April 2006, which is worth EUR 28,137,500. If you impose an initial margin of 1%, the Repurchase Price is:

Question281: Click on the Exhibit Button to view the Formula Sheet. Borrowing USD for 12 months and lending them for
6 months (means that you are making):

Question282: Click on the Exhibit Button to view the Formula Sheet. For which countrys currency is ZAR the ISO code?

Question283: Click on the Exhibit Button to view the Formula Sheet. The Model Code rules that deals at non-current rates:

Question284: Click on the Exhibit Button to view the Formula Sheet. Gambling or betting amongst market participants has obvious dangers and:

Question285: Click on the Exhibit Button to view the Formula Sheet. You are quoting forward FX prices to a broker subject to finding a counterparty for a matching transaction. The Model Code says:

Question286: Click on the Exhibit Button to view the Formula Sheet. A CD with a face value of USD50 million and a coupon of 4.50% was issued at par for 90 days and is now trading at 4.50% with 30 days remaining to maturity. What has been the capital gain or loss since issue?

Question287: Click on the Exhibit Button to view the Formula Sheet. 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?

Question288: Click on the Exhibit Button to view the Formula Sheet. Which of the following will tend to have the lowest yield?

Question289: Click on the Exhibit Button to view the Formula Sheet. One of your brokers asks you to buy and sell EUR/ USD at the same price net of brokerage in order to allow him to clear a transaction.

Question290: Click on the Exhibit Button to view the Formula Sheet. Where the Committee for Professionalism of the ACI has been notified of a breach of the letter or spirit of the Model Code, it

Question291: Click on the Exhibit Button to view the Formula Sheet. How is an outright forward FX transaction quoted?

Question292: Click on the Exhibit Button to view the Formula Sheet. When using legal documentation, proposed modifications:

Question293: Click on the Exhibit Button to view the Formula Sheet. The use of mobile phones within the dealing room is not considered good practice except:

Question294: Click on the Exhibit Button to view the Formula Sheet. You are quoted the following market rates: spot EUR/GBP 0.6670 6M (182-day) EUR 2.35% 6M (182-day) GBP 3.75% What is 6-month EUR/GBP?

Question295: Click on the Exhibit Button to view the Formula Sheet. Extended trading hours and off-premises dealing can involve additional hazards, the avoidance of which requires clear controls. The Model Code prescribes best market practice. Which of the following is true?

Question296: Click on the Exhibit Button to view the Formula Sheet. What is the Overnight Index for EUR?

Question297: Click on the Exhibit Button to view the Formula Sheet. You have quoted your customer the following eurodollar deposit rates: 1M 5.375-25% 2M 5.4375-3125% 3M 5.5-375% The customer says, "I give you USD 20 million in the two's". What have you done?

Question298: Click on the Exhibit Button to view the Formula Sheet. A CD can usually only be issued by what type of institution?

Question299: Click on the Exhibit Button to view the Formula Sheet. Deals transacted direct or via a broker prior to
5:00am Sydney time on Monday morning:

Question300: Click on the Exhibit Button to view the Formula Sheet. You buy a 181-day 2.75% CD with a face value of USD 1,500,000 at par when it is issued. You sell it in the secondary market after 150 days at 2.60%. What is your holding period yield?

Question301: Click on the Exhibit Button to view the Formula Sheet. An option is:

Question302: Click on the Exhibit Button to view the Formula Sheet. What is the purpose of an initial margin on a futures exchange?

Question303: Click on the Exhibit Button to view the Formula Sheet. The premium on an option contract is:

Question304: Click on the Exhibit Button to view the Formula Sheet. You bought a USD 4,000,000 6x9 FRA at 6.75%.
The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 5.50%. What is the settlement amount at maturity?