ACI-Operations Certificate Set 1

1.

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

the taping of conversations between counterparties model signing-off and implementation controls the separation between front/back office duties the existence of contingency plans

2.

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

1 year 3 years 5 years 10 years

3.

A collateral pool can be defined as:

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

4.

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

amounts higher than USD 10,000,000.00 or the equivalent in other currencies amounts higher than USD 1,000,000.00 or the equivalent in other currencies any amount unless dealt via a broker any amount by any counterparty

5.

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

by the end of the trading day on the next business day on the value date as soon as they become apparent

6.

What is a nostro bank account?

an account held with another bank an account another bank holds with you a trust account a suspense account

7.

What is a feature of multilateral netting?

there are no more than two participants involved in the netting process there is no redistribution of default risk there is a central clearing house no legal entity is required

8.

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?

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 million to cover the short balance and leave the long balance as it is You should lend the surplus USD 5 million in order to overdraft charges on the short balance with theinterest earned on the loan You should instruct the bank with the long balance to pay USD 5 million to the other bank

9.

Physical securities reconciliation software packages are based on:

SWIFT message type 5XX SWIFT message type 2XX SWIFT message type 320 SWIFT message type 400

10.

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

measuring market exposure defining capital adequacy evaluating country risk monitoring counterparty credit risk

ACI-Operations Certificate Set 1

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ACI-Operations Certificate Set 1

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