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3I0-012 ACI Dealing Certificate Free Practice Exam Questions (2025 Updated)

Prepare effectively for your ACI 3I0-012 ACI Dealing Certificate certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 740 questions

What ought to be done in the event a trade erroneously occurs at an off-market rate?

A.

By agreement between the two counterparties, the trade must be cancelled as soon as practically possible since a rate amendment is prohibited.

B.

By agreement between the two counterparts, the trade should, as soon as practically possible, either be cancelled or have its rate amended to an appropriate market rate.

C.

The off-market rate should be adjusted as soon as possible to the appropriate current market rate and a new authenticated SWIFT confirmation sent immediately to the counterparty.

D.

Nothing need be done, since once a trade is agreed to by the front office it is a binding agreement for both counterparties.

What happens when a coupon is paid on bond collateral during the term of a classic repo?

A.

Nothing

B.

A margin call is triggered on the seller

C.

A manufactured payment is made to the seller

D.

Equivalent value plus reinvestment income is deducted from the repurchase price

What type of institution is the typical drawer of banker’s acceptances?

A.

Credit institution

B.

Investment bank

C.

Corporate

D.

Central Bank

A 30-day 4% CD with a face value of GBP 20,000,000.00 is trading in the secondary market with 20 days remaining to maturity at 4.05%.

What would be your holding period yield if you bought the CD now and held it to maturity?

A.

4.05%

B.

4.0%

C.

3.891%

D.

3.838%

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?

A.

1.4340

B.

1.4343

C.

1.4337

D.

1.4335

What are the primary reasons for taking an initial margin in a classic repo?

A.

Counterparty risk and operational risk

B.

Counterparty risk and legal risk

C.

Collateral illiquidity and counterparty risk

D.

Collateral illiquidity and legal risk

You quote a customer a spot cable 1.6050-55 in USD 3,000,000.00. If they sell USD to you, how much GBP will you be short of?

A.

4,816,500.00

B.

1,869,158.88

C.

1,868,57677

D.

4,815,000.00

You have taken 3-month deposits of EUR 10,000,000.00 at 0.60%, EUR 5,000,000.00 at 0.40% and EUR 5,000,000.00 at 0.50%.

What is the average rate of your long position?

A.

0.525%

B.

0.45%

C.

0.75%

D.

0.375%

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

Which Greek letter is used to describe the ratio of change in the option price compared with change in the price of the underlying instrument, when all other conditions are fixed?

A.

beta

B.

gamma

C.

delta

D.

theta

Where there are shared management responsibilities or where an investment or shareholding exists in a broker by a counterparty:

A.

the broker is not obligated to reveal any material connections provided Chinese Walls are in place.

B.

the broker is not required to reveal any connections at all.

C.

the broker is legally obliged to advise his clients of any material connections that exist.

D.

is a matter which is not covered by the Model Code.

Under Basel Securitization rules the highest potential risk weight is:

A.

350%

B.

750%

C.

1250%

D.

1500%

Which of the following statements about “standard settlement instructions” (SSI) is correct?

A.

The Head of Operations has the sole responsibility of ensuring the correctness and validity of the SSI set up.

B.

SSIs should be stored and maintained in the bank’s general static data system.

C.

Each institution should have a separate SSI team to prevent I minimise the potential risk of fraud.

D.

SSI staff should be fully integrated within Operations to insure consistent and reliable settlement guidelines.

If you funded your fixed-income investment portfolio with short-term deposits, how would you hedge your interest rate exposure with interest rate swaps?

A.

Pay fixed and receive floating through swaps for the term of the portfolio

B.

Pay floating and receive fixed through swaps for the term of the portfolio

C.

You cannot: the maturity of the swaps would be longer than that of the deposits

D.

You should not: there would be too much basis risk

Principals who enter into an interest rate swap with the intention of shortly afterwards assigning or transferring the swap to a third party:

A.

should never reveal their future dealing intentions to their counterparties

B.

should make clear their intention to do so when initially negotiating the deal

C.

should agree upon the method of assignment before transacting

D.

should only reveal any such intentions after the confirmations have been exchanged

Principals are allowed to:

A.

visit a broker’s dealing room to arrange or confirm deals

B.

visit a broker’s dealing room with the permission of the management of both parties

C.

deal from within a broker’s dealing room with the permission of the broker’s management

D.

place an order with a broker from within the same broker’s office

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

A.

credit spread tightening of the long term position

B.

if the yield curve is inverted

C.

if the yield curve becomes steeper

D.

if there is a downward parallel shift in the yield curve

What is the correct interpretation of a EUR 5,000,000.00 one-week VaR figure with a 99% confidence level?

A.

A loss of at least EUR 5,000,000.00 can be expected in 99 out of the next 100 weeks.

B.

A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks.

C.

A loss of at most EUR 5,000,000.00 can be expected in 1 out of the next 100 days.

D.

A loss of at least EUR 5,000,000.00 can be expected in 1 out of the next 100 weeks.

If you have created a ‘synthetic asset’ by buying and selling a USD/CHF swap, what have you done?

A.

Created an exposure to the CHF

B.

Created an exposure to the USD

C.

Switched a CI-IF asset temporarily into USD without taking currency risk

D.

Switched a USD asset temporarily into CHF without taking currency risk

If you lend for 3 months and borrow for 6 months, you may be said to:

A.

Be over-lent

B.

Have a negative gap

C.

Be exposed to higher interest rates

D.

Be over-borrowed

Which of the following statements about operational risk awareness is correct?

A.

It is good practice to collect and disclose incidents and near-misses for the future benefit of the professional community.

B.

It is good practice to collect and analyze incidents and near-misses so as to set up preventive action plans for the future.

C.

A report describing operational risks should be made at the request of the front office.

D.

A report describing operational risks should be made at least once a year and provided to the front office.

The buyer of a currency put option has:

A.

Substantial opportunity for gain and limited risk of loss

B.

Substantial risk of loss and substantial opportunity for gain

C.

Limited risk of loss and limited opportunity for gain

D.

Substantial risk of loss and limited opportunity for gain

What is settlement risk in FX?

A.

The risk of failure of a payments or settlement system

B.

The risk that only one side of an exchange of currencies will be made

C.

The risk of payments ‘gridlock’ in a real-time gross settlement system

D.

The risk that default by a counterparty before the value date means you have to replace the defaulted deal at a worse rate

The 180-day CAD/CHF rate is bid 62 and the 90-day CAD/CHF rate is bid 29. What is the bid rate for 120 days, assuming straight-line interpolation?

A.

33

B.

42

C.

27

D.

40

Which of the following both provide credit enhancement to a true-sale securitization?

A.

reserve account and third-party insurance

B.

subordinated tranches and creditworthiness of the originator

C.

creditworthiness of the originator and third-party insurance

D.

reserve account and interest rate hedging

Where dealing for personal account is allowed, what safeguards to prevent abuse or insider dealing are stated by the Model Code?

A.

The need to maintain confidentiality with respect to non-public price sensitive information

B.

The maximum amounts or sizes of trades dealers are allowed to trade for their own account

C.

The instruments/products dealers can trade for their own account

D.

The pledge that no action is taken by employees that might adversely affect the interests of clients or counterparties

Taking collateral to hedge the credit risk on a counterparty means that you have:

A.

Eliminated credit risk

B.

Eliminated market risk

C.

Taken a guarantee from the issuer of the collateral

D.

Taken on market, legal and operational risks

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 thefollowing is true?

A.

Off-premises dealing should be strictly prohibited.

B.

After-hours trading should be prohibited.

C.

Deals transacted after normal business hours or off-premises should only be undertaken on mobile phones approved by management.

D.

Deals transacted after normal business hours or off-premises either by mobile phones or any other equipment should only be undertaken with the approval of management.

Convert 8.25% quoted on a semi-annually compounded money market basis for USD to the equivalent annually-compounded bond basis.

A.

8.30%

B.

8.52%

C.

8.54%

D.

8.69%

Which of the following transactions would have the effect of shortening the average duration of liabilities in the banking book?

A.

selling holdings of 30-year German Government bonds

B.

replacing retail savings accounts with 3-month borrowings under repo

C.

selling futures contracts on 30-year German Government bonds

D.

placing a 20-year covered bond in the market

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