NISM Series I: Currency Derivatives Mock Test (Set 1)

/50

NISM Series I: Currency Derivatives Mock Test (Set 1)

1 / 50

1. Which of the following example is that of Market Making ?

2 / 50

2. With respect to trading time for the world’s major currencies in the OTC market, which of the following statements is TRUE?

3 / 50

3. When a person buys a put option, it means that he is buying a right to sell the underlying asset – State True or False?

4 / 50

4. Mr. Pritam from India invested USD 20,000 in US equity markets at an exchange rate of 60 for USDINR. After a year, these investments grew to USD 23,000. Mr. Pritam then sold off the entire investments and repatriated his money to India. He found that his effective return (profit) was 20%. Calculate the exchange rate at which Mr. Pritam received when he repatriated the money to India.

5 / 50

5. Mr. Singh executes the following currency futures trade – buys USDINR and sells EURINR for an equivalent amount. What view has Mr. Singh expressed?

6 / 50

6. An Indian company has both imports and exports in GBP of equal amounts. However, the export realization comes a week after the payments are made for imports. Which type of currency risk is the company facing?

7 / 50

7. What is the simultaneous buying and selling of EURINR futures contract across two different maturities called?

8 / 50

8. A trader sees that 3 month USDINR forward is quoting at 65.5 while futures are quoting at 65.8. So he sells in futures and buys in the forward market. Determine the type of market participant would this trader be?

9 / 50

9. Ms. Mamta buys 10 lots of USDINR 1 month futures when the price was 65.00/65.10 and squares off 5 lots after a week when the price was 65.15/65.35. What were her profits or losses?

10 / 50

10. ______ is TRUE for Exchange Traded Derivatives.

11 / 50

11. A trader sells 10 lots of EURINR 1 month futures when the price was 82.60/82.80 and squares off 5 lots after a week when the price was 83.75/83.85. Calculate the profit or loss on the squared-up transaction.

12 / 50

12. Assume that the one-year interest rate is 1% in the US, 2% in the UK, and 7% in India. If the current GBPINR spot rate is 91.60, what would be the one-year future rate of GBPINR?

13 / 50

13. The default mode of settlement in OTC spot market is ______ .

14 / 50

14. What is the initial deposit that is required to initiate a currency futures position called?

15 / 50

15. Internationally for most of the currency pairs, the base currency is _____ .

16 / 50

16. State True or False – Unlike options, future contracts give the seller both rights and obligations.

17 / 50

17. An multinational company has export revenue in JPY and it uses part of it to make import payments in USD and the balance is converted into INR. The company is concerned about JPYUSD risk for its import payments. Which of the following best describes the company’s risk and currency futures strategy that it may use to mitigate the risk?

18 / 50

18. Consider a scenario in which USDINR was quoting as 63.40/63.42 and EURUSD as 1.1450 / 1.1453 in the morning and by the day end USDINR moves to 63.10/63.12 while EURUSD moves to 1.1420/1.1422. What would best describe the movement of currency during the day?

19 / 50

19. Consider a situation where, in the OTC market, one-month GBPUSD is quoted at 1.6120/1.6150. In the currency futures market, one-month USDINR is quoted at 64.10/64.50, and one-month GBPINR is quoted at 93.40/93.70. A trader conducts calculations and believes there is a potential to construct a GBPUSD position using USDINR and GBPINR futures, which would be at a premium to the GBPUSD quote in the OTC market. What trade strategy is best suited to capture this arbitrage opportunity, given that both OTC and futures have the same settlement dates?

20 / 50

20. What are the primary accounting categories that any market participant needs to uphold when managing currency futures accounts?

21 / 50

21. An individual invested USD 100,000 in US equities anticipating appreciation in the US stock market. Over the next year, the investments increased in value to USD 120,000. The investor chose to sell the portfolio and repatriate the capital and profits to India. At the time of the initial investment abroad, the exchange rate was 44.5, and when converting USD back into INR, the investor received an exchange rate of 46. What is the return on investment in USD and INR, respectively?

22 / 50

22. Guidelines for accounting of currency futures contracts are issued by ___________.

23 / 50

23. Of the following, what best describes the guidelines for brokers regarding the execution of client orders?

24 / 50

24. Generally, who are the market makers in OTC market for currency options?

25 / 50

25. In the case of currency options, the net option value is added for short options and deducted for long options from the liquid net worth of clearing members – True or False?

26 / 50

26. Which of the following is true?

27 / 50

27. The USDINR futures are trading at 60.0025/60.0050. If the INR appreciates by one tick, what will be the new trading price? Assume there is no change in the spread.

28 / 50

28. At what time does trading in the JPYINR futures contract stop on the contract expiry day?

29 / 50

29. A registered broker purchases 30 lots of USDINR at 58.6 and sells 18 lots the same day at 58.80 in his proprietary account. The settlement price for the day was 58.40. What would be the mark-to-market margin payable?

30 / 50

30. If the one-year interest rate is 1% in the US and 9% in India, and the current USDINR spot rate is 56, which of the following could be the closest to the six-month future rate of USDINR?

31 / 50

31. At the beginning of the week, EURUSD is 1.05, and GBPUSD is 1.65. At the end of the week, EURUSD is 1.2515, and GBPUSD is 1.55. Which of the following best describes the price movement?

32 / 50

32. At 11 am, USDINR was quoting at 56.40/56.60. At 3 pm, it was quoting at 56.50/56.70. What would best describe the currency move during the day?

33 / 50

33. The lot size for EURINR futures contract is __________.

34 / 50

34. Mr. Khan purchases a May USDINR contract for Rs 49,000. The RBI reference rate for final settlement is fixed at 48.70. Calculate the profit or loss he incurred.

35 / 50

35. Can it be inferred that a decline in USDINR implies a reduction in volatility?

36 / 50

36. Mr. Mehta, a trading member and his two clients do the foll trades in EURINR one month futures on a particular day: Proprietary position: Buy 200 lots and sell 170 lots, Client X position : Buy 40 lots and Sell 80 lots , Client Y Position : Buy 120 lots and sell 80 lots. What would be the total open position of the trading member ?

37 / 50

37.

Mr. A believes that USDJPY will move from 87 to 82 in the next 2-3 months. Since USDJPY contracts are not traded in India, what would Mr. A do using future contracts of USDINR and JPYINR?

38 / 50

38. Mr. Sharma invested INR 200,000 in an Indian corporate bond for a year, yielding a return of 14% in one year. He plans to use the proceeds from the maturity of this bond to fund his son’s education in the US. At the time of investing in the corporate bond, USDINR spot rate was 50, and the one-year premium was 3%. The person decides to hedge currency risk using USDINR one-year futures. At the end of one year, how many USD can this person remit to his son?

39 / 50

39. A trading member buys 20 lots of USDINR March futures on day 1. On the same day, he also sells 10 lots of April USDINR futures. What would be his position in his proprietary book at the end of the day in USD?

40 / 50

40. If a person who is employed with a broking company gives trading advise on USDINR on TV, what best describes the steps that broking house needs to take to ensure that its employee complies with guidelines?

41 / 50

41. Assuming everything else remains the same, any development resulting in widening the current account deficit of India will result in _______ .

42 / 50

42. An international trading company has export revenue in USD, and it uses part of it to make import payments in GBP, with the balance converted to INR. The company is concerned about GBPUSD risk for its import payments. Which of the following best describes the company’s risk and the currency futures strategy it may use to mitigate the risk?

43 / 50

43. What is true for OTC ie. Over The Counter traded derivatives ?

44 / 50

44. One of the key differences in the OTC and exchange-traded EUR-INR currency option market is related to ___________.

45 / 50

45. Regarding the settlement of OTC forward contracts, which of the following is true?

46 / 50

46. What steps can an investor take if they are dissatisfied with the decision of an Arbitration Tribunal?

47 / 50

47. At 11 am, the RBI announced the credit policy and a reduction in interest rates. Typically, such a move will result in ________ of the rupee.

48 / 50

48. Which of the following accurately characterizes the guidelines regarding the type of agreement a sub-broker must enter into with their clients?

49 / 50

49. How can a multinational company utilize currency futures strategy to mitigate the risk associated with JPYUSD exchange rate fluctuations for its import payments, considering its export revenue is in USD and it uses part of it for payments in JPY?

50 / 50

50. If Mr. A executes a spread trade and his view turns out to be correct, anticipating the three-month GBP/INR futures to quote at 70.30 and the six-month futures to quote at 70.70 after a month, how much profit will he make?

Your score is

0%

Exit

Scroll to Top