3I0-013 ACI Operations Certificate challenging Questions and Answers

Never remunerated

Remunerated at the EONIA rate

Remunerated at the rate of the deposit facility

Remunerated at the main refinancing rate

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 00:00 CET deadline.

CLS settlement members may rescind instructions unilaterally provided that the rescind messages reach the CLS Bank before the 06:30 CET deadline.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank before the 00:00 CET deadline.

CLS settlement members may rescind instructions bilaterally only if the rescind messages reach the CLS Bank after the 06:30 CET deadline.

Is higher than its face value if, and only if, its coupon rate is higher than its yield to maturity on the coupon date

Is higher than its face value if, and only if, its coupon rate is lower than its yield to maturity on the coupon date

Is lower than its face value if, and only if, its coupon rate is higher than its yield to maturity on the coupon date

Is always higher than its face value

A CD is a certificate for a gold deposit

The CD issuer can redeem the certificate at any time

It is a non-negotiable instrument

A CD is a certificate for a time deposit

A security the owner has the right to convert

A security the issuer has the right to redeem

A security the owner has the right to redeem

A security the issuer has the right to convert

The loss of the entire principal amount of the deal

The “replacement risk”, also known as “replacement-cost risk”

The loss of the negative mark-to-market value of the deal

As the deal is in the future, there is no impact on P&L

can be used to show the counterparty the amounts it has to pay

can be used as the basis of reporting the bank’s position to the relevant central bank of the country concerned, against the limit granted for the bank

can be used as the basis of reporting the bank’s position to the relevant tax regulations office of the country concerned

can be used to adjust the country limits

Each transaction should be processed always in advance of the payment cut-off time.

Know the status of your trade.

Prioritize trade settlement considering payment cut off times including currency sensitivity and size of amount.

A trade booked in the front office should be available to the cash management department no later than the close of trading day for nostro account management.

MT 202 and MT 103

MT 202 and MT 210

MT 200 and MT 103

MT 103 and MT 210

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

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.

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.

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

Tuesday, 30 March

Wednesday, 31 March

Thursday, 1 April

Friday, 2 April

Market risk and settlement risk

Market risk, settlement risk and basis risk

Market risk, settlement risk and counterparty risk

Settlement risk and counterparty risk

Operational Risk

Market Risk

Systemic Risk

Credit Risk

The margin

The spread

The variation

The premium

Same day value payment in JPY

Same day value payment in EUR

Value tomorrow payment in AUD

Value tomorrow payment in NZD

17:00 (5:00 p.m.) Eastern Time (ET)

17:30 (5:30 p.m.) Eastern Time (ET)

18:00 (6:00 p.m.) Eastern Time (ET)

19:00 (7:00 p.m.) Eastern Time (ET)

14 December

15 December

16 December

17 December

By the end of the trading day

On the next business day

On the value date

As soon as they become apparent

The derivatives dealing and processing module

Standard back office features

The FX spot and forward dealing input and processing module

The securities trading and processing module

7.61%

6.40%

7%

The yield cannot be determined

The lead manager to acquire the entire issue

The lead manager to acquire the entire issue and the issuer to redeem the note at specified dates

The issuer to redeem agreed upon quantities of the note at specified dates

The note holder to sell the notes at specified dates

An internet-based input system

A SWIFT-based input system

A TARGET-based input system

A screen-based input system

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trades outside of CLS Bank on a net basis.

If there is only one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally decide to settle the trade outside of CLS Bank on a net basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then both sides should bilaterally agree to settle the trade outside CLS Bank on a gross basis.

If there is more than one FX trade with a single counterparty to settle in the identical currencies, then either side can unilaterally instruct the CLS Bank to settle the trades.

An account that you hold with another commercial bank

An account that another bank holds with you

An account that you hold with the Bank of England

Your suspense account at the European Central Bank

The flat ECB deposit facility rate

The ECB deposit facility rate minus 25 b.p.

The average of each day's EONIA rate minus 25 b,p,

The average of each day's EONIA rate minus 25 b.p. unless that is lower than the ECB deposit facility rate

Operations

Compliance

Internal Audit

Archives

The front office

The back office (Operations)

The U department

The middle office

MTn99

MT300

MT370

MT670/671

EUR 1,388.89

EUR 1,561.11

EUR 2,255.56

EUR 2,951.39

GBP 2,509,166.67

GBP 2,509,041.10

GBP 2,509,016.39

GBP 2,520,000.00

Fixed rate notional

Forward rate note

Fixed rate note

Floating rate note

Are commonly used to register off-balance sheet movements

Are used to book internal tax related items

Generally mirror the nostro statements

Are reserved for audit and compliance purposes only

The real-time gross settlement (RTGS) system owned and operated by the Eurosystem

The system used in Germany for settling high value domestic securities transactions

The pan-Europe netting system used for reducing credit risk for derivative transactions

The system used by the European Banking Federation to clear cross border Euro payments

No later than the value date

Within 2 days

Within 1 week

On the day it is discovered

A FX Swap

A repurchase agreement

An interest rate swap (IRS)

A dual swaption

Finland did not participate in TARGET but it does participate in TARGET2

The cut-off time for TARGET2 is 20:00 (8.00 p.m.) CET, whereas the cut-off time for TARGET was 18:00 (6.00 p.m.) CET

TARGET2 runs on a single shared technical platform whereas TARGET did not

TARGET2 processes payment orders denominated in EUR as well as USD

FRNYUS33

ECBFDEFF

BCLXLULL

SNBZCHZZ

It refers to an electronic settlement between Euroclear and Clearstream

It is an electronic settlement between Western Union and Clearcom

It refers to the relationship between two correspondent banks

It designates the exchange of payment orders between a nostro and a vostro account

Daily fixing of EUR interest rates within the EMU zone

Daily fixing of EUR interest rates in London

A rate used for the settlement of USD FRAs between European counterparties

The official successor to LIBOR rates

Final settlement of interbank funds transfers on a continuous, trade by trade basis throughout the day

Lower costs through fewer payments passing through nostro accounts

Lower costs through less labor intensive methods

Reduced market risk due to smaller values of open positions

Free of settlement payment

Cash settlement

Same day value settlement

Delivery-versus-payment

The difference between the current price of an asset and its previous close

A statistical measure of price fluctuations as an annualized percentage

The measure of the liquidity of a contract or security

The difference between the annual high and low of a security

The strike price of a Bermudan option is an average.

A Bermudan option can be exercised only on a few specific dates prior to expiration.

A Bermudan option can be exercised at any time before its maturity date.

A Bermudan option can be exercised only at maturity.

No action is required. The credit interest earned on the credit balance will offset the debit interest incurred on the short balance

You should borrow USD 5,000,000.00 to cover the short balance and leave the long balance as it is

You should lend the surplus USD 5,000,000.00 in order to compensate the overdraft charges on the short balance with the interest earned on the loan

You should instruct the bank with the long balance to transfer USD 5,000,000.00 to your nostro account at the other bank

Nostro funding payment

Third party payment

Value spot USD payment

Value spot payment for currency equivalents> USD 3,000,000.00

Interest rate and currency risks

Interest rate, stock price and currency risks

Stock price and currency risks

Stock price risk

A list of the final maturity of bonds per value date

An account of the possible fees to be paid

A comparison of the overdraft interest to be paid on different nostro accounts

A report produced to show the anticipated balance on the account as a result of running off existing business

The following Monday

Saturday

The last business day of the month

The first business day of the following month

To prevent that a failed order results in a failure to settle that day, which in turn would lead to an incompletely-reconciled account.

To facilitate the handling of complex security transactions.

In order to save data capacity in electronic archiving systems.

To anticipate the fact that clearing houses stop processing in the afternoon, whereas payment orders may still be processed until 6 p.m.

To compare the cash entries that have passed through the bank’s internal nostro accounts, with the actual cash movements at the bank’s agent account. Thus, expected cash movements are reconciled with actual cash movements.

To compare the securities entries that have passed through the bank’s internal nostro accounts, with the actual securities movements at the bank’s agent account

To compare expected securities movements with actual securities movements

To provide an overview of all the transactions listed by counterparty

It gives the counterparty more time to cancel a deal

It reduces errors and costs

It gives front-office staff more time to process the payment orders

It reduces the number of trades

Receive JPY 105,263.16

Pay JPY 950,000,000

Receive JPY 950,000,000

Pay JPY 105,263

Thursday, 27 June

Friday, 28 June

Saturday, 29 June

Monday, 1 July

Currency pair, price

Currency pair, counterparty, time

Currency pair, price, counterparty

Counterparty, price