Foreign Exchange

Risk management is heavily tested and often underestimated. Market risk, credit risk, liquidity risk and operational risk must be clearly distinguished. Tools such as VaR, limits and stress testing appear frequently. These sections reward clarity, not calculation. Liquidity risk refers to: A. Default risk B. Market volatility C. Inability to fund or exit positions D. Operational failure ✅ Answer: C

For many candidates, the Derivatives section of the ACI Dealing Certificate can seem intimidating. Terms such as futures, swaps and options often sound complex, leading candidates to expect difficult calculations and advanced mathematics. Fortunately, the reality is much simpler. The ACI exam focuses on understanding how these instruments work, why market participants use them, and how they help manage financial risk. Futures: Locking in Future Prices A futures contract is an

Many candidates can calculate FX forwards but fail due to flawed logic. Higher interest rate currencies trade at a forward discount. Lower interest rate currencies trade at a forward premium. This principle rescues multiple exam questions even when calculations are forgotten. In other words, the currency with the higher interest rate will have the weaker forward FX rate. You will almost certainly be asked to price up forward FX in the exam. Even though you will be given the f

If you are preparing for the ACI Dealing Certificate, FX is not optional knowledge. It is core. And within FX, three instruments dominate exam questions: Spot Forwards Swaps Candidates usually understand them conceptually.Where they lose marks is in pricing, value dates, forward points, and swap mechanics. Let’s strip this back to what you actually need to know to pass. 1️⃣ FX Spot – The Foundation Definition: A spot transaction is an agreement to exchange one currency for an

One of the fastest ways to lose marks in the ACI Dealing Certificate exam is simple: You read the quote correctly… But you choose the wrong side. It’s rarely a knowledge problem. It’s a perspective problem. The exam assumes you instinctively understand: Who is the market maker Who is the client (price taker) Who is buying Who is selling Which side of the quote applies If you hesitate on any of those, you’re at risk. Let’s fix that properly. 1️⃣ How Examiners Frame Pricing Tra