ACI-Operations Certificate Set 3

The settlement amount is the sum of the redemption value plus all coupons paid by the issuer. ✘ If the yield and the coupon are exactly the same, the settlement amount and the face value will beidentical. ✘ The settlement amount is always calculated using the redemption price. ✘ On a coupon date, if the bond quotes at par, the settlement amount and the face value will be identical. ✔

liquidity, market and counterparty risk ✘ only a funding risk ✘ only a liquidity and a funding risk ✘ settlement, funding and liquidity risk ✔

a higher volume on settlement ✘ government borrowing to fall ✘ bond prices to rise in response to higher interest rates ✘ bond prices to fall ✔

the original rate of the bill ✘ the rate at which the bill is bought ✘ the time to maturity of the bill ✘ the date on which the bill matures ✔

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 thecoupon date ✘ is lower than its face value if, and only if, its coupon rate is higher than its yield to maturity on thecoupon date ✘ is always higher than its face value ✔

auction markets conducted by the U.S. Treasury for U.S. Treasury bills ✘ the repo market ✘ the foreign exchange market ✘ the over-the-counter market for U.S. Government Bonds ✔

step up bonds ✘ index linked bonds ✘ premium bonds ✘ par bonds ✔

the valuation and transfer of collateral in general collateral (GC) repos only ✘ the valuation and transfer of collateral in triparty repos only ✘ the valuation and transfer of collateral in special repos only ✘ the valuation and transfer of collateral in any type of repo ✔

Monte Tittoli Milano ✘ Euro clear Brussels ✘ Clear stream Banking Luxembourg ✘ SWIFT ✔

buy the American securities directly on the NYSE ✘ open a bank account in the United States ✘ open an account in a bank in the U.S. that has an account at the NYSE ✘ buy the securities directly in Luxembourg ✔