Online Access Free 3I0-008 Exam Questions

Click on the Exhibit Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6-month LIBOR for the next payment date is fixed today at
4.95%. How would you hedge the swap using FRAs? How to hedge an IRS with a strip of FRAs?

• A.buy a strip of 0x6, 6x12, 12x18 and 18x24 FRAs
• B.sell a strip of 0x6, 6x12, 12x18 and 18x24 FRAs
• C.sell a strip of 6x12, 12x18 and 18x24 FRAs
• D.buy a strip of 6x12, 12x18 and 18x24 FRAs

Click on the Exhibit Button to view the Formula Sheet. A broker can consider a deal as done if:

• A.He is confident that the dealer will not back out of the deal.
• B.One party acknowledges interest.
• C.He receives verbal acknowledgement from the dealer.
• D.Both parties have established credit lines for each other.

Click on the Exhibit Button to view the Formula Sheet. One of your brokers asks you to buy and sell EUR/USD at the same price net of brokerage in order to allow him to clear a transaction.

• A.You must have the authority to switch names.
• B.You must have prior senior management approval.
• C.You must execute such transactions as promptly as possible within policy guidelines .
• D.All of the above.

Click on the Exhibit Button to view the Formula Sheet. A 3-month (90-day) USD deposit is
5.5625% and 6-month (180-day) USD deposit is 5.75%. What is the 3x6 USD deposit rate?

• A.5.8425%
• B.5.8561%
• C.5.75%
• D.5.8342%

Click on the Exhibit Button to view the Formula Sheet. How can material divergences between the value of cash and collateral be managed in a documented sell/buy-back?

• A.Either of the above, but usually (b)
• B.Either of the above, but usually (a)
• C.Re-pricing
• D.Margin maintenance