ACI-Operations Certificate

1.

A callable bond attributes a right to:

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

2.

What is a junk bond?

an AAA-rated security in payment default a sub-investment grade instrument an OECD Government bond a bond typically paying lower yields than an investment grade instrument

3.

A redemption premium for a bond is

always paid in case of an early redemption paid, if stipulated in the prospectus, at an early redemption always paid at final maturity only paid if a bond is redeemed after its initially scheduled maturity

4.

The yield of a 1 month FRN in EUR depends on

the level of short-term EUR interest rates the level of medium-term EUR interest rates the slope of EUR yield curve the level of long-term EUR interest rates

5.

When an over-the-counter broker executes an order for your bank, what information is required on the confirmation you are sent?

the price of the security the price of the security; the role played by the broker the price of the security; the role played by the broker; and the commission, if any, that was charged The price of the security; the role played by the broker; the commission, if any, that was charged andthe security that was bought or sold

6.

Which of the following is characteristically of a CD?

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

7.

In the UK, T-Bills are issued by:

the Government (Debt Management Office) the Bank of England the FSA the International Monetary Fund (IMF)

8.

In a scenario where long-term interest rates are higher than short-term interest rates, the yield curve would best be described as:

flat negative or inverse positive neutral

9.

A UK Treasury Bill has 91 days to maturity. Its redemption value is GBP 10,000.00. What is the purchase price of this bill using a discount rate of 6% per annum?

GBP 9,400.00 GBP 9,852.22 GBP 9,850.41 GBP 9,848.33

10.

A USD 1 million US Treasury Bill (91 days) is offered at a discount rate of 5.50%. The offer price will be:

USD 1,000,000.00 USD 986,097.22 USD 945,000.00 USD 986,287.67

ACI-Operations Certificate

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