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ACI 3I0-010 - Questions & Answers

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Question 1
Single choice

The control failings involving Barings and Daiwa highlight the critical importance of what operational risk management practice?

A.

the taping of conversations between counterparties

B.

model signing-off and implementation controls

C.

the separation between front/back office duties

D.

the existence of contingency plans

Question 2
Single choice

The maximum term for which a London Certificate of Deposit may be issued is:

A.

1 year

B.

3 years

C.

5 years

D.

10 years

Question 3
Single choice

A collateral pool can be defined as:

A.

assets lent by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

B.

liabilities owned by members of a payments system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

C.

assets owned by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

D.

assets swapped by members of a payment system collectively available to the system as collateral to enable them to obtain funds in specific circumstances

Question 4
Single choice

The prompt sending and checking of confirmations is considered a best practice when dealing in:

A.

amounts higher than USD 10,000,000.00 or the equivalent in other currencies

B.

amounts higher than USD 1,000,000.00 or the equivalent in other currencies

C.

any amount unless dealt via a broker

D.

any amount by any counterparty

Question 5
Single choice

When should discrepancies between front-office and back-office systems be resolved?

A.

by the end of the trading day

B.

on the next business day

C.

on the value date

D.

as soon as they become apparent

Question 6
Single choice

What is a nostro bank account?

A.

an account held with another bank

B.

an account another bank holds with you

C.

a trust account

D.

a suspense account

Question 7
Single choice

What is a feature of multilateral netting?

A.

there are no more than two participants involved in the netting process

B.

there is no redistribution of default risk

C.

there is a central clearing house

D.

no legal entity is required

Question 8
Single choice

You have two nostro accounts in USD, one account is long USD 5 million and the other is short USD 5 million.

What action should be taken to reconcile the accounts?

A.

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

B.

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

C.

You should lend the surplus USD 5 million in order to overdraft charges on the short balance with the interest earned on the loan

D.

You should instruct the bank with the long balance to pay USD 5 million to the other bank

Question 9
Single choice

Physical securities reconciliation software packages are based on:

A.

SWIFT message type 5XX

B.

SWIFT message type 2XX

C.

SWIFT message type 320

D.

SWIFT message type 400

Question 10
Single choice

Which of the following is the main objective of position-keeping?

A.

measuring market exposure

B.

defining capital adequacy

C.

evaluating country risk

D.

monitoring counterparty credit risk

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