Which type of Derivatives

contracts are generally not

regulated by a regulatory
authority and the exchange's Over the Over the
Exchange traded Commodity
1 self-regulatory organization, Counter Stock Futures Counter 1 Edit | Delete
derivatives derivatives
although they are affected Derivatives Derivatives
indirectly by national legal
systems, banking supervision
and market surveillance?

Tripartite
Tripartite Tripartite Tripartite Bipartite
agreement
agreement agreement agreement agreement
Which of the following best between him
between him, between him, between him, between him
describes the guidelines with and his client
broker and his broker and his broker and his and his client
2 respect to nature of agreement clearly 1 Edit | Delete
client clearly client clearly client clearly clearly
that a sub-broker has to specifying
specifying rights specifying the specifying rights specifying the
execute with his clients? rights and
and obligations rights of broker but and obligations brokerage to be
obligations of
of each party not his obligations of each party charged
each party

Which of the following acts is

mainly responsible for INCOME TAX
3 SC(R)A, 1956 SC(R)A, 1956 FEMA, 1999 SEBI Act 1 Edit | Delete
governing the securities ACT 1961
trading in India?

A person has invested INR

100,000 in an Indian corporate
bond for a year giving a return
of 16% in one year. The
person plans to use the
proceeds from the maturity of
corporate bond to fund his
son's education on US. At the
4 time of investing in the 2231 2320 2231 2450 2350 1 Edit | Delete
corporate bond, USDINR spot
rate was 50 and one year
premium was 4%. 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?

No separate position limit is

prescribed at the level of
5 clearing member. However, TRUE FALSE TRUE . * 1 Edit | Delete
the clearing member shall
ensure that his own trading
position and the positions of
 each trading member clearing
through him are within the
limits

There are no formal rules or

mechanisms for ensuring
market stability and integrity,
Over the Exchange
and for safeguarding the Over the Counter Commodity
6 Counter traded Stock Futures 1 Edit | Delete
collective interests of market Derivatives derivatives
Derivatives derivatives
participants. Which type of
Derivatives contracts are being
referred to here :

US Dollar is widely used as

7 'vehicle currency' in foreign TRUE TRUE FALSE * . 1 Edit | Delete
exchange transactions

These are participants in

8 All of above Investors Hedgers Speculators All of above 1 Edit | Delete
foreign exchange market

The initial margin so computed

would be subject to a minimum
9 of 1.75% on the first day of TRUE FALSE TRUE * . 1 Edit | Delete
USDINR futures trading and
1% thereafter.

Arbitragers take advantage of

10 Mispricing Hedgers Volatility Mispricing Speculators 1 Edit | Delete
____ in the markets?

The amount of asset that has

Futures
11 to be delivered under one Contract size US Dollar Futures delivery Contract size 1 Edit | Delete
quantity
contract is the _______.

The clearing member's liquid

networth after adjusting for the
initial margin and extreme loss
12 TRUE FALSE TRUE * . 1 Edit | Delete
margin requirements must be
at least Rs. 50 lakhs at all
points in time

Assume that price of a USD-

INR call option is quoted as
INR 0.25 / 0.27 (bid price / ask
13 0.27 0.27 0.25 .026 .024 1 Edit | Delete
price). Given this quote, at
what price could a company
buy the call option?

Short hedge means Underlying

14 TRUE FALSE TRUE * . 1 Edit | Delete
position of long in the foreign
currency and Hedging position
 of short in currency futures

A Buy position A Buy position of

A Buy position of A Buy position of A Buy position
of 20 contracts 2000 contracts
20 contracts with 1000 contracts of 20000
Proprietary position : Buy with contract with contract
15 contract size of with contract size contracts a 1 Edit | Delete
20*1000*40.0000 indicates size of 1000 size of 1000 and
1000 and a price of 20 and a price price of Rs.
and a price of a price of Rs.
of Rs.40.0000 of Rs.40.0000 40.0000
Rs.40.0000 40.0000

An international trading
company has export revenue
in USD and it uses part of it to
USD USD USD USD
make import payments in GBP
depreciating USD appreciating appreciating depreciating depreciating
and balance is converted to
against GBP; against GBP; against GBP; against GBP; against GBP;
INR. The company is
16 Short USDINR Short GBPINR Short USDINR Short USDINR Short GBPINR 1 Edit | Delete
concerned about GBPUSD risk
and long and long USDINR and long and long and long
for its import payments. Which
GBPINR for for same maturity GBPINR for GBPINR for USDINR for
of the following best describes
same maturity same maturity same maturity same maturity
company's risk and the
currency futures strategy that it
may use to mitigate the risk?

In OTC market, one month

USDINR is quoting at
43.75/44.00 and futures for
same maturity is quoting at Buy USDINR in Buy USDINR in
Buy USDINR in Sell USDINR in Buy USDINR in
44.50/44.60. Which of the OTC and sell in OTC and sell in
17 OTC and sell in OTC and buy in OTC and sell in 1 Edit | Delete
following describes possible futures, 60 futures, 75
futures, 50 paise futures, 85 paise futures, 50 paise
arbitrage trade and possible paise paise
arbitrage profit per USD if the
arbitrage trade is carried until
maturity?

6% of open 5% of open 6% of open 6% of open

Which of the following best 5% of open
interest or EUR interest or EUR interest or EUR interest or EUR
describes the SEBI prescribed interest or EUR 5
18 5 million, 10 million, 5 million, 10 million, 1 Edit | Delete
open position limit for EURINR million, whichever
whichever is whichever is whichever is whichever is
contracts for a client? is higher
higher higher higher higher

A trader executes following

currency futures trade: buys INR
JPY weakening JPY strengthening JPY weakening INR weakening
19 one lot of USD/INR, sells one strengthening 1 Edit | Delete
against USD against USD against USD against JPY
lot of JPY/INR. What view has against USD
he executed?

Which of the following

organizations issues
20 ICAI ICSI ICWAI IIM ICAI 1 Edit | Delete
guidelines for accounting of
currency futures contracts?
 In a system where no vehicle
currency is used to calculate
21 n(n-1)/2 n(n-1)/2 (n-1)/2 n/2 (n-1) (n/2) 1 Edit | Delete
the currency pairs or exchange
rates, formula is :

Professional Clearing
Members are one of the
entities in the clearing and
22 TRUE FALSE TRUE * . 1 Edit | Delete
settlement system of the
Currency Derivatives
Segment. True or False?

If domestic currency
appreciates against the foreign
currency, the exposure would
23 result in loss for residents TRUE FALSE TRUE * . 1 Edit | Delete
purchasing foreign assets and
gain for non residents
purchasing domestic assets.

Intimate the Intimate the

Promptly Intimate the
Which of the following best Promptly intimate execution or execution or
intimate the execution or
describes the guidelines for the execution or non-execution non-execution
24 execution or non-execution 1 Edit | Delete
brokers with respect to non-execution of within two hour within three
non-execution of by the end of the
execution of client orders the order of deal hour of deal
the order day
execution execution

Trading
25 'Cli' order stands for _______. Client order Client order member's own Proprietary order Client ID 1 Edit | Delete
order

Broker should
Broker should have a
Broker should Broker should Broker should
Which of the following best ensure that his separate audit
promptly issue promptly issue make
describes the guidelines for sub-brokers team which
contract notes to contract notes to guidelines for
26 brokers with respect to issuing issue contract inspects the 1 Edit | Delete
his clients and his clients and his sub-brokers
of contract notes for execution notes every process of
clients of his clients of his sub- to issue
of orders? week to their issuing contract
sub-brokers brokers contract notes
clients notes at all his
sub-brokers

One tick move One tick move will One tick move One tick move One tick move
USD-INR currency futures are
27 will be 41.2525 be 41.2525 or will be 41.2550 will be 41.2565 will be 41.2585 1 Edit | Delete
currently traded at 41.2500
or 41.2475 41.2475 or 41.2450 or 41.2485 or 41.2450

As a trader you believe

Long GBPINR, Long GBPINR, Short GBPINR,
28 GBPUSD will move from 1.63 Long GBPINR Short GBPINR 1 Edit | Delete
Short USDINR Short USDINR Long USDINR
to 1.68 in next 2 months.
Which of the following would
 you do to execute this view
using currency futures contract
of GBPINR and USDINR?

If a trader in the currency

futures market expects INR will
29 TRUE FALSE TRUE * . 1 Edit | Delete
appreciate against USD then
he will buy USD/INR

Underlying be it Underlying be it
A derivatives contract cannot increase in increase in
30 equity, interest equity, interest Exchange 1 Edit | Delete
exist without an ________. volatility arbitrage
rate etc. rate etc.

Which of the following best

Total open
describes the total open Total open Minimum open Total open Maximum open
interest at the
31 interest which is used for the interest at end of interest in the interest at end interest in the 1 Edit | Delete
time of
purpose of monitoring of open previous day previous day of previous day previous day
monitoring
position during the day?

A Forward contract is a
32 TRUE FALSE TRUE * . 1 Edit | Delete
standardized contract

A client buys a USD call option

at strike of 45.5 and pays a
33 premium of INR 0.3. What 45.8 45.8 45.1 45.7 46.87 1 Edit | Delete
would be the breakeven point
for the transaction?

The units of
The standardized items in a The date and the price quotation Location of
34 All of above All of above 1 Edit | Delete
futures contract are : ______. month of delivery and minimum settlement
price change

In a system of 100 currencies

with no vehicle currencies,
35 potentially there would be 4950 4950 4900 4800 4850 1 Edit | Delete
____ currency pairs or
exchange rates.

Who receives end of day

reports from all branches & corporate corporate branch
36 delear Trader 1 Edit | Delete
dealers under same trading manager manager manager
member?

An employee of a broking Employee to Employee to also

Employee to
house has started giving also disclose the disclose the
Employee to be also share None of the
37 advice on taking trading proprietary proprietary 1 Edit | Delete
presentable technical above
position on USDINR currency interest, interest, including
analysis to
futures on TV. Which of the including long long and short
support currency
following best describes the and short position, of
 steps that broking house position, of broking house in view
needs to take to ensure that its broking house in USDINR currency
employee complies with USDINR futures contracts
guidelines? currency futures
contracts

In Currency futures contracts,

the buyer and the seller lock
38 themselves into an _________ Exchange Rate Interest Rate Exchange Rate Discount Rate Closing Rate 1 Edit | Delete
for a specific value or delivery
date.

Which term best describes

39 Free floating Managed float Pegged to USD Free floating Pegged to gold 1 Edit | Delete
EUR currency?

Under normal circumstances

the Futures price trades at a same price as depends on the
40 higher higher lower 1 Edit | Delete
____ price than the Spot price spot type of contract
:

Assume you are an exporter

and you want to sell USD that
you have received as export
41 remittance. The bank quotes a 45.1 49.1 47.1 45.1 45.02 1 Edit | Delete
price of 45.10/ 45.12 for
USDINR. At what price can
you sell one unit of USD?

The market where currencies Foreign Foreign

Fixed Income
42 are traded is known as the Exchange Equity Market Bond Market Exchange 1 Edit | Delete
Market
______. Market Market

A trading member has two

clients in currency futures
segment and one client in
currency option segment. At
the end of a trading day, one
of the clients in currency
2000 short for
futures segment has 5000
currency futures
USD short position and the
43 11000 USD 4000 USD 11000 USD and 2000 long 20000 USD 1 Edit | Delete
other client has 4000 USD
for currency
long position. Additionally, the
options
currency option client has
2000 USD long position. What
is the gross open position for
the trading member for the
purpose of monitoring open
position?[
 The USD/CAD (US - Canadian
44 Dollars) currency pair settles in T+1 T+1 T+3 T+2 1+4 1 Edit | Delete
_____ basis.

A futures contract is a
45 FALSE TRUE FALSE * . 1 Edit | Delete
Customized contract

Go long Say neutral

If you are bullish about the Short USDINR Short USDINR USDINR since markets
46 Buy Dollars 1 Edit | Delete
Indian Rupee you would ____. currency futures currency futures currency may turn
futures volatile

To cover 99% VAR over 1 day,

47 the price scan range is fixed at TRUE FALSE TRUE * . 1 Edit | Delete
3.5 Standard Diviation

Expiry date i.e the last trading

day will be two business days
48 TRUE TRUE FALSE * . 1 Edit | Delete
prior to the Value date / Final
Settlement Date.

Assume that on 1st December

2010, USD-INR spot was at
45, premium for January 2011
maturity put option at strike of
45.5 is INR 0.54/0.55 and
premium for January 2011
maturity call option at strike of
Profit of INR Profit of INR Profit of INR Loss of INR
49 45 is INR0.71/0.72. A client Loss of INR 0.2 1 Edit | Delete
0.91 0.91 0.15 0.96
executes a trade wherein he
buys put at a strike of 45.5 and
sells a call at a strike of 45. On
expiry the RBI reference rate is
44.75. How much net
profit/loss did the client make
per USD?

The best buy order in the

50 trading system is the order Highest price Highest price Lowest quantity Highest quantity Lowest price 1 Edit | Delete
with the ______?

On 15th January Mr. Arvind

Sethi bought a January
USDINR futures contract
51 which cost him Rs.43,000. (-) Rs.100 (-) Rs.100 (+) Rs. 1000 (+) Rs. 100 (-) Rs. 1000 1 Edit | Delete
Each USDINR futures contract
is for delivery of USD1000.
The RBI reference rate for final
settlement was fixed as 42.90.
 How much profit/loss did he
make?

A person has invested USD

100,000 in US equities with a
view of appreciation of US
stock market. In next one year,
his investments in US equities
appreciated in value to
USD120,000. The investor
decided to sell off his portfolio
52 and repatriate the capital and 20%, 24% 20%, 16% 20%, 24% 20%, 20% 20%, 18% 1 Edit | Delete
profits to India. At the time of
investing abroad the exchange
rate was 44.5 and at the time
of converting USD back into
INR, he received an exchange
rate of 46. How much is the
return on investment in USD
and in INR respectively?*[

A Trading member Corporate

Manager can set up _____ clearing
Can set limits only Cannot set up
53 level and ______level trading branch, dealer branch, dealer member, 1 Edit | Delete
for himself limits
limits for any branch/ dealer of trading member
the trading member.

Mr. A wants to shift funds from

Indian Rupees to Philippine
Pesos, he sells INR for US
Investment Intervention Transaction
54 Dollars and then sells the US Vehicle currency Vehicle currency 1 Edit | Delete
currency currency Currency
Dollars for Pesos. In this
transaction US Dollar is
working as:

Any corporate
Which of the following
not having
segments of market
55 NRIs Trusts NRIs FII exposure to 1 Edit | Delete
participants are not allowed to
foreign
trade in currency futures?
currency

One year interest rates in US

and India are say 5% and 10%
respectively and the spot rate
56 Rs. 45.20 Rs. 45.20 Rs. 41.25 Rs. 43.70 Rs. 42.65 1 Edit | Delete
of USD in India is Rs. 43. Then
one year USD-INR futures fair
value is :

57 TRUE FALSE TRUE * . 1 Edit | Delete

Settlement Price of Daily mark
 to market settlement will be the
closing price of the futures
contracts for the trading day
and the final settlement price
shall be the RBI reference rate
for last trading date of the
contract

One year interest rate is 4% in

US and 1% in UK. If current
GBPUSD spot rate is 1.65,
58 1.6995 1.6995 1.6005 1.7325 1.65 1 Edit | Delete
which of the following could be
closest to one year future rate
of GBPUSD?

One of the key difference in

Requirement of
OTC and Exchange traded
proof of
59 USD-INR currency option Both (2) and (3) Lot size Market timings Both (2) and (3) 1 Edit | Delete
underlying FX
market is related to
transaction
___________.

For a calendar spread position,

the extreme loss margin is
60 charged on one-third of the TRUE FALSE TRUE * . 1 Edit | Delete
mark-to-market value of the
far-month contract

Extreme loss margin is

computed at 1% on the mark-
61 to-market value of the Gross TRUE FALSE TRUE * . 1 Edit | Delete
Open Position for USD/INR
contract

If US Dollar-Rupee moved
from 43.00 to 43.30, the US appreciated, appreciated, depreciated, appreciated, depreciated,
62 1 Edit | Delete
Dollar has ___________ and depreciated depreciated appreciated strengthened weakened
the Rupee has __________

The limit price is always set

63 TRUE TRUE FALSE * . 1 Edit | Delete
higher than the market price?

An intra-currency pair spread

consists of one long futures
64 and one short futures contract. TRUE FALSE TRUE * . 1 Edit | Delete
Both have the same underlying
but different maturities

What are the basic accounting Initial margin - Initial margin - Profit and Loss -
65 Initial margin - Mark to market 1 Edit | Delete
heads to be maintained by any currency futures currency futures currency futures
currency - currency
market participant for and Mark to and Mark to
 maintaining currency futures market - market - currency futures futures
accounts? currency futures futures

A trader in India expects

international gold prices to
appreciate from USD 1500 per
ounce to USD 1800 in next six
months. To benefit from the
view, he buys 30 grams of gold
at Rupees 22,000 per gram
and also sold 6 month
USDINR futures at 46. After
six months, gold prices
66 appreciated to USD 1800 per 15 lots, 13.6% 15 lots, 13.6% 15 lots, 13% 18 lots, 12% 18 lots, 13.6% 1 Edit | Delete
ounce and the trader sold gold
at Rupees 24,000 per gram
and unwinds currency futures
contract at 44. Assuming 1
ounce is equal to 3 grams,
how many lots of currency
futures would he have used to
hedge the currency risk and
how much was the real return
for the investor?

While entering a stop loss

67 order, one needs to specify the trigger price high price trigger price low price price band 1 Edit | Delete
_____

As a trader you believe

EURUSD will move from 1.38
to 1.44 in next 2 months.
Long EURINR, Long EURINR, Short EURINR,
68 Which of the following would Long EURINR Short EURINR 1 Edit | Delete
Short USDINR Short USDINR Long USDINR
you do to execute this view
using currency futures contract
of EURINR and USDINR?

Investment Invoice
US Dollar reflects its Currency and Currency and
69 Both of above Both of above None of above 1 Edit | Delete
substantial international role as Transaction Intervention
Currency Currency

A client of a trading member is

required to enter into _____
70 with the trading member an agreement an understanding an arrangement negotiations an agreement 1 Edit | Delete
before he can commence
trading.

71 Not possible Not possible Possible Both of above 1 Edit | Delete

In OTC currency derivative None of the
 market in India, is it possible above
for a corporate to write an
option and receive a net
premium?

On 15th January Mr. Arvind

Sethi bought a January
USDINR futures contract
which cost him Rs.43,000.
Each USDINR futures contract
72 (+) Rs. 100 (+) Rs. 100 (+) Rs. 1000 (-) Rs.100 (-) Rs. 1000 1 Edit | Delete
is for delivery of USD1000.
The RBI reference rate for final
settlement was fixed as 43.10.
How much profit/loss did he
make?

Presume Mr. A is expecting a

remittance for USD 5000 on 29
Buying five
August.Wants to lock in the Buying five Selling five
Selling five Selling five thousand
foreign exchange rate today so contracts of thousand
73 contracts of contracts of USD- contracts of 1 Edit | Delete
that the value of inflow in USD-INR contracts of
USD-INR futures INR futures USD-INR
Indian Rupee terms is futures USD-INR futures
futures
safeguarded. Mr. A can do so
by ________.

What is the minimum net worth

for a company for it to be
74 eligible for applying to become Rs 100 crore Rs 100 crore Rs 200 crore Rs 50 crore Rs 75 crore 1 Edit | Delete
an authorized exchange for
currency futures?

If one year interest rate is 2%

in US and 10% in India. If
current USDINR spot rate is
75 45.76 45.76 40.48 47.52 42.24 1 Edit | Delete
44, which of the following
could be closest to the six
month future rate of USDINR?

The closing price for a futures

contract is currently calculated
76 as the last half an hour TRUE TRUE FALSE * . 1 Edit | Delete
weighted average price of the
contract.

In a system of 10 currencies, if
one currency is selected as the
77 Nine Nine Ten Forty Five Hundred 1 Edit | Delete
vehicle currency and used for
all transactions, there would be
a total of ______ currency
 pairs or exchange rates to be
dealt with.

Which of the following best 15% of open 15% of open 15% of open 15% of open 12.5% of open
describes the SEBI prescribed interest or JPY interest or JPY interest or JPY interest or JPY interest or JPY
78 open position limit for JPYINR 2000 million, 2000 million, 1000 million, 75 million, 2000 million, 1 Edit | Delete
contracts for a bank trading whichever is whichever is whichever is whichever is whichever is
member? higher higher higher higher higher

The Currency Derivatives

Segment trading system
79 cost of carry client names cost of carry basis arbitrage gain 1 Edit | Delete
indicates the _____ for each
contract.

A trading member (TM) has

two clients 'A' and 'B' and he
also does proprietary trading in
currency futures. On day 1, TM
buys 8 lots of USDINR one
month futures and also sells 2
lots of the same contract on
the same day in his proprietary
book. On the same day, client 18,000; 6,000; 18,000; 6,000; 6,000; 6,000;
80 zero; 6,000; 6,000 6,000; zero; zero 1 Edit | Delete
'A' buys 8 lots of USDINR one 6,000 6,000 6,000
month futures and also sells 2
lots of the same contract while
client 'B' sells 8 lots and buys 2
lots. What would be the open
position (in USD) of the trading
member, client 'A' and client 'B'
respectively at the end of day
1?

A Corporate manager is higher

81 in the user hierarchy than the TRUE FALSE TRUE * . 1 Edit | Delete
Branch Manager.

An active trader in currency

options market wants to
execute his view on change in
volatility over a period of time
Calendar
82 and wants to be insulatedfrom Calendar spread Short option Long option Covered call 1 Edit | Delete
spread
changes in other factors
impacting option pricing. What
option strategy is he likely to
use?

83 The gross open positions of TRUE FALSE TRUE * . 1 Edit | Delete

the trading member across all
 contracts should not exceed
15% of the total open interest
or USD 50 million whichever is
higher.

Use of a vehicle currency

greatly ______ the number of
None of the
84 exchange rates that must be Reduces Reduces Increases Both of above 1 Edit | Delete
above
dealt with in a multilateral
system.

Exchange rates
Base currency is Base currency Quotation
Base currency is are quoted in
the first currency is the second currency is the
85 Which of the following is true? the first currency per unit of 1 Edit | Delete
in a currency currency in a first currency in
in a currency pair quotation
pair currency pair a currency pair
currency

client's
In the Currency Derivatives positions are
Segment Clients' positions are not taken into
86 arrived at by summing together net (buy - sell) gross (buy + sell) net (buy - sell) net or gross account in the 1 Edit | Delete
____positions of each Currency
individual client. Derivatives
Segment

In the Currency Derivatives

segment, trading cum clearing
87 member, clear and settle their TRUE FALSE TRUE * . 1 Edit | Delete
own trades as well as trades of
other trading members (TMs).

A trading member has two

clients in currency futures
segment and one client in
currency option segment.
During the day, each of the
clients in currency futures
2000 short for
segment sold 6000 USD and
currency
bought 3000 USD. At the end
No open futures and
88 of a trading day, each of the 9000 USD 9000 USD 12000 USD 1 Edit | Delete
position 2000 long for
client in currency futures
currency
segment have 6000 USD short
options
position and 3000 USD long
position. Additionally, the
currency option client has
3000 USD long position. What
is the gross open position for
the trading member for the
purpose of monitoring open
 position

A trading member (TM) has

two clients 'A' and 'B' and he
also does proprietary trading in
currency futures. On day 1, TM
buys 12 lots of USDINR one
month futures and also sells 2
lots of the same contract on
the same day in his proprietary
book. On the same day, client
30,000; 10,000; 30,000; 10,000; 10,000; 10,000; zero, 10,000; 10,000; zero;
89 'A' buys 12 lots of USDINR 1 Edit | Delete
10,000 10,000 10,000 10,000 zero
one month futures and also
sells 2 lots of the same
contract while client 'B' buys
12 lots and sells 2 lots. What
would be the open position (in
USD) of the trading member,
client 'A' and client 'B'
respectively at the end of day
1?

An IT professional buys a
house for INR 500,000 for
which payment has to be
made after three months. As
he is expecting to receive USD
10,000 in three months, he
executes 10 USDINR futures
contracts to hedge currency
risk at a price of 50. When he
received the payment, he
90 Sold, Lower Sold, Lower Bought, Higher Sold, Higher Bought, Lower 1 Edit | Delete
converted USD into INR with
his bank at a price of 51 for
making the payment for the
house and also settles the
contract at a price of 49. Given
this situation, would he have
sold/ bought USDINR futures
and would the effective price
for house be lower than or
higher than USD 10,000?

Unpredicted movements in
91 exchange rates expose Currency Risks Currency Risks Dollar Risk Interest Rate risk Systematic Risk 1 Edit | Delete
investors to ______.

92 Any dealers 1 Edit | Delete

A branch manager can define Dealers in his Dealers in his The Corporate The trading
 limits for ________. branch branch Manager member

For a person who is trading in

both currency futures and
currency options, the open
93 TRUE TRUE FALSE * . 1 Edit | Delete
interest would be monitored for
combined gross positions in
futures and options

For a USDINR Currency

Futures contract at the NSE,
the previous day's settlement
price is Rs.40.0000 and
today's settlement price is
94 Rs.41.0000. An investor's Sell (-) Rs. 50,000 (-) Rs. 50,000 (+) Rs. 50,000 (-) Rs. 5,000 (+) Rs. 5,000 1 Edit | Delete
position of 50 contracts is
brought forward from the
previous day. What will be his
market to market settlement
value?

Outstanding
Over the Options Trade
OTC Derivatives stand for Over the Counter Transaction Commodity
95 Counter Credit 1 Edit | Delete
________. Derivatives Credit price risks
Derivatives Derivatives
Derivatives

Base price of the USD/INR

Futures Contracts on the first
96 TRUE FALSE TRUE * . 1 Edit | Delete
day shall be the theoretical
futures price.

removed from
removed from removed from removed from
If an order does not find a removed from the the trading
the trading the trading the trading
97 match in the trading system, it trading system at system when 1 Edit | Delete
system at the system after system on the
is _____ the end of the day the buyer /
end of the day seven days expiry day
seller wishes

RBI reference LIBOR reference

RBI reference rate MIBOR rate on
The Final Settlement price of a rate on the last rate on the last
on the last trading the last trading None of the
98 Currency Futures contract is trading day of trading day of 1 Edit | Delete
day of the futures day of the above
the ____________. the futures the futures
contract futures contract
contract contract

If a trader in the currency

futures market expects INR to
99 FALSE FALSE TRUE * . 1 Edit | Delete
depreciate against USD then
he will sell USD/INR

100 The value of each currency 1 Edit | Dele

gold exchange gold exchange Interest rate Commodity None of the
against another currency was
 derived from ___________ rate. rate. exchange exchange rate above

Comm
gold Intere gold
odity None Edit |
excha st rate excha
2 The value of each currency against another currency was derived from ___________ excha of the 1 Delet
nge excha nge
nge above e
rate. nge rate.
rate

Edit |
3 The exchange of two currencies is called? FX FX SX CNX STT 1 Delet
e

Bretto
Bomb Bretto
Bretto Delhi n
ay n
n Comm Butter Edit |
Wood Wood
4 For exchange currency the countries adopted a system called Woods odity and 1 Delet
s s
Syste Excha egg e
Syste Syste
m nge syste
m m
m

Edit |
As part of the system, all currencies were pegged to ____ at a fixed rate and USD value USD,p USD,p EUR, Pegge GBP,
5 1 Delet
was ____ to gold. egged egged USD d,USD EUR
e

Edit |
6 ____ became the dominant currency of the world. USD USD GBP EUR JYP 1 Delet
e

free free Com Market

floatin floatin modit capitali None Edit |
7 Which method follow for valuation of currencies? g g y zation of 1 Delet
metho metho excha metho these e
d d nge d

Edit |
US US Euro
8 Which is the “vehicle” currency in foreign exchange transaction? EUR JYP 1 Delet
Dollar Dollar Dollar
e

Edit |
9 which currency second only to the US Dollar? EUR EUR JPY GBP CAD 1 Delet
e

Edit |
1
______is very liquid around the world, practically around the clock JYP USD EUR JYP CAD 1 Delet
0
e

1 Chica
The nickname _____ is derived from the telegrams used to update the GBPUSD. Cable Cable Kent 1Edit |
1 go
Delet
 e

Edit |
1 FALS
Currency market, the concept of a 24-hour market has become a reality. TRUE TRUE * . 1 Delet
2 E
e

Edit |
1 FALS
London market opens during afternoon (as per India time). TRUE TRUE * . 1 Delet
3 E
e

UK
UK
and Edit |
1 and Europ
Australia currency market open after the____ US Japan India 1 Delet
4 US e
Marke e
Market
t

New
New US Europ Edit |
1 In the______, nearly two-thirds of the day‟s activity typically takes place in the morning York
York Marke e India 1 Delet
5 hours marke
market t Market e
t

USD USD USE Edit |

1 As per Bank for International Settlements (BIS) survey of April 2010, daily turnover of USD EUR
3.9trilli 3.9trilli 2.5 1 Delet
6 currencies in the global market is approximately_____? 1.5 1.0
on on trillion e

Quotin Quotin
Term Pair None Edit |
1 g g
. The two currencies are called “base currency” (BC) and ________. Curre Curren of the 1 Delet
7 curren curren
ncy cy above e
cy cy

Edit |
1 FALS
The BC is the currency that is priced and its amount is fixed at one unit. TRUE TRUE * . 1 Delet
8 E
e

Merch None Edit |

1 Dealer
Interbank market is the market between_____ Bank Bank ant of the 1 Delet
9 s
Banker above e

Merch None Edit |

2
Who quote price for buy & sale in inter bank market? Dealer Dealer Bank ant of the 1 Delet
0
Banker above e

Edit |
2 FALS
In interbank market merchants are price takers and banks are price givers. TRUE TRUE * . 1 Delet
1 E
e

Buyer Buyer
Bid Bid Bid Edit |
2 The prices quoted for buying is called______ and the price quoted for selling is called Price , Price ,
Price , Price , Price 1 Delet
2 as_______ Saller Offer
offer or offer , e
Price Price
Ask or Ask Saller
 Price Price Price

Edit |
2 Suppose a bank quotes USDINR spot price as 45.05/ 45.06 to a merchant. What is the 45.000 45.00
45.06 45.06 45.05 1 Delet
3 ask price? 5 06
e

Edit |
2 Sprea Marke Sprea
The difference between bid and offer price is called as? Profit Loss 1 Delet
4 d t Price d
e

None Edit |
2 Liquidit Liquidi Volum Tradin
Spread is an important parameter to note while assessing market ? of the 1 Delet
5 y ty e g
above e

None Edit |
2 In USDINR spot market, the spreads are wide at the time of opening and gradually start Narro Narro Positi
Upper of the 1 Delet
6 _____as the market discovers the price. wing wing ve
above e

None Edit |
2 Abbrev Narro Positi Abbrev
The offer price is generally quoted in ______form. of the 1 Delet
7 iated wing ve iated
above e

Edit |
2 FALS
Offer price is quoted in terms of last two decimal places. TRUE TRUE * . 1 Delet
8 E
e

High Edit |
2 Whenever the base currency buys more of the quotation currency, the base currency has Apprec Depre Appre Weak
Volum 1 Delet
9 ? iated ciated ciated ened
e e

High Edit |
3 Whenever the base currency buys more of the quotation currency, the quotation currency Depre Appre Streng Depre
Volum 1 Delet
0 has ? ciated ciated th ciated
e e

Edit |
3 FALS
n India, OTC market is open from 9:00 AM to 5:00 PM. TRUE TRUE * . 1 Delet
1 E
e

Edit |
3 The market is open for the last half hour is meant only for interbank dealings for banks to FALS
TRUE TRUE * . 1 Delet
2 square off excess positions. E
e

None Edit |
3 Bid Market
_____is the price available to the bank in the interbank market.. IBR IBR of 1 Delet
3 Price Price
these e

Edit |
3 FALS
IBR could differ from bank to bank TRUE TRUE * . 1 Delet
4 E
e

Banks price large value merchant transactions_______ 1

3 Inter Stand Small Inter Marke Edit |
5 Bank ard rate Bank t Rate Delet
Rate Rate Rate e
(IBR) (IBR)

Edit |
3 Card Small Market Card
For small value transactions, banks publish_____ a standardized price. IBR 1 Delet
6 Rate Rate Rate Rate
e

Intern
Privat
Interna India ationa Merch Edit |
3 e
The opening levels of OTC market are primarily dependent on______ tional Marke l ant 1 Delet
7 Marke
Market t Marke Market e
t
t

equilib equilib Close Edit |

3 Bid Offer
which price market clears buy and sell orders? rium rium d 1 Delet
8 price Price
price price Price e

Edit |
3 For large volume transactions, the bid/ask difference could be higher than that for small FALS
TRUE TRUE * . 1 Delet
9 value transactions. E
e

Edit |
4 RBI reference rate is the rate published daily by RBI for spot rate for various currency pairs FALS
TRUE TRUE * . 1 Delet
0 transaction at around 12:30PM. E
e

Cash
Deliver Delive Cash or
Cash Edit |
4 y of ry of P&L delive
The settlement in the OTC spot market happens by actual ________. Differe 1 Delet
1 curren curren Settle ry of
nce e
cy cy ment curre
ncy

None Edit |
4 Value Value Trade Tom
Settlement date is also called as _____ of the 1 Delet
2 Date Date Date Date
above e

Edit |
4 Trade
Settlement period of SOPT market are____ T+2 T+1 T+2 T+3 1 Delet
3 Date
e

forwar forwar
None Edit |
4 d” Future d” Deliver
Any settlement date after spot value date is called ______ of the 1 Delet
4 value Date value y Date
above e
dates dates

Edit |
4 “tom” “tom” Marke Closed T+2
If happens one day after trade date, the price is called as _____ 2 Delet
5 rate rate t Rate Rate rate
e
 Edit |
4 If currency pairs prices are not directly available in the market than currency derived Cross Cross Card Marke
IBR 1 Delet
6 by____ Rate Rate Rate t Rate
e

Streng Narro Streng None Edit |

4 Week
A GDP growth rate higher than expected may mean relative ______of the currency. thenin w thenin of the 1 Delet
7 end
g range g above e

The
The Feder
Federa al
l Open Open Finan
Edit |
4 Market Marke ce
In US, _________ is responsible for making key decisions about interest rates. FEMA Govt. 1 Delet
8 Commi t Minist
e
ttee Comm ry
(FOM ittee
C) (FOM
C)

Edit |
4 FALS
Derivative called underlying, can be interest rate or loan. FALSE TRUE . * 1 Delet
9 E
e

Edit |
5 FALS
Forward contract are customized contract. TRUE TRUE * . 1 Delet
0 E
e

Edit |
5 FALS
Forward contract are standardized contract? FALSE TRUE * . 1 Delet
1 E
e

Edit |
5
LEAPS are options with maturity up to _____years. 3 2 1 3 5 1 Delet
2
e

Equity Put Equity Equity Edit |

5 Call
______is an example of basket option . index Optio index Optio 1 Delet
3 Option
option n option n e

Stand None Edit |

5 Excha
Swaps contracts are _______ contracts. Private ardize Private of the 1 Delet
4 nge
d above e

Intere Differe
Same Same None Edit |
5 st rate nt
Interest rate swaps related cash flows between the parties in the________. curren curren of the 1 Delet
5 differe curren
cy cy above e
nce cy

5
Currency Swaps involves exchanging with the cash flows in one direction being in _____ Differe Intere Differ Same None 1Edit |
6
nt st rate ent curren of the Delet
 curren differe curren cy above e
cy nce cy

Floatin Fixed , Floatin Floati Edit |

5 Fixed,
A payer Swaptions is an option to receive _____and pay _____ g, floatin g, ng , 1 Delet
7 cash
fixed g fixed cash e

Edit |
5 Volatili Liquidi Trenc Volatil
Growth Drivers of Derivatives are increased _____in financial markets. Price 1 Delet
8 ty ty hancy ity
e

Edit |
5 Growth Drivers of Derivatives are improvement in communication facilities and decrease in FALS
TRUE TRUE * . 1 Delet
9 transaction costst E
e

Edit |
6 Hedge Hedge Specu Arbitr
_______use the derivatives to reduce risk. Trader 1 Delet
0 r r lator ager
e

Edit |
6 Specul Arbitra Trade Hedge Spec
.___________ use the derivatives to future movement of prices and assume the risk. 1 Delet
1 ator ger r r ulator
e

Curre Forwa Edit |

6 Future Future Close
Derivatives help in discovery of _______ nt rd 1 Delet
2 Prices Prices Price
Price Price e

Edit |
6 FALS
Derivatives have helped in increasing the volume in underlying cash market TRUE TRUE * . 1 Delet
3 E
e

Edit |
6 FALS
Derivative help transfer of risk? TRUE TRUE * . 1 Delet
4 E
e

Edit |
6 The price of derivative converge with the price of the underlying at the expiration of the FALS
TRUE TRUE * . 1 Delet
5 derivative contract E
e

Edit |
6 FALS
Derivative due to their inherent nature are linked to the underlying cash market. TRUE TRUE . * 1 Delet
6 E
e

None Edit |
6 Specul Specu Forwar
_____ trades shift to more control environment of derivative market. OTC of the 1 Delet
7 ative lative d
above e

Edit |
6 The key difference being that exchange traded derivative r standardized while OTC FALS
TRUE TRUE */ . 1 Delet
8 contract r customized. E
e
 None Edit |
6 Non Custo
Currency future are a ______ product. Linear Linear of the 1 Delet
9 linear mized
above e

None Edit |
7
A ___ is a minimum size of price change in currency market. Tick Pip Tick Nul of the 1 Delet
0
above e

Edit |
7 FALS
A tick is a maximum size of price change in currency market. FALSE TRUE * . 1 Delet
1 E
e

Edit |
7
The USD lot size are_____ 1000 500 1000 120 100 1 Delet
2
e

Edit |
7
The one tick value of USDINR is____ 2.5 3.5 1.5 1 2.5 1 Delet
3
e

Future Cash Curren Spot Edit |

7 Spot
Spot price are at which the underlying asset trades in the_____ Marke Marke cy Marke 1 Delet
4 Market
t t Market t e

Edit |
7 The last business day (excluding Saturdays) of the month is known as the Value date or FALS
TRUE TRUE * . 1 Delet
5 Final Settlement date of each futures contract. E
e

seven five
two two two Edit |
7 Expiry date are refers to the last day on which the contract will be traded (Last Trading worki busin
workin busine workin 1 Delet
6 Day), and is _______prior to the final settlement date. ng ess
g day ss day g day e
day day

Edit |
7 10000 20000 10000
In currency trading the lot size of JPYINR_____ ? 1000 10000 1 Delet
7 0 0 0
e

SPAN MTM Cash Edit |

7 The amount deposited for the first time in the margin account while entering the currency Initial Initial
Margi Margi Margi 1 Delet
8 future contract is termed as ____ Margin Margin
n n n e

Marki
Markin None Edit |
7 At the end of each trading day the margin account is adjusted to show the investors profit/ ng to Initial
g to SPAN of the 1 Delet
9 loss depending upon the futures closing prices. This methodology is know as _______ marke Margin
market above e
t

T+1 T+1
Edit |
8 day Trade T+1 T+2 day
Marking to market margin charge on_____ 1 Delet
0 before day day day befor
e
the e the
start start
 trading tradin
g

Banks
Banks
which
which r
r
license Edit |
8 licens Individ Comp
Who are authorized dealer in OTC market? d by Bank 1 Delet
1 ed by uals any
RBI ti e
RBI ti
deal in
deal in
FX
FX

Edit |
8 FALS
Retail speculators with NO exposure to FX can trade in OTC market. FALSE TRUE * . 1 Delet
2 E
e

Edit |
8 FALS
Future offer lower cost of trading as compared to OTC market. FALSE TRUE * . 1 Delet
3 E
e

Edit |
8 ________is to reduce the volatility in future cash flows by locking in the future currency Hedge Specu Arbitra Hedg
Trader 1 Delet
4 rates. rs lator ger ers
e

Edit |
8 Specul Arbitr Specul Hedg
______ does not have a real exposure to foreign currency risk. Trader 1 Delet
5 ator ager ator ers
e

Edit |
8 Specul Specu Arbitra Hedg
______ play a vital role in the futures markets. Trader 1 Delet
6 ator lator ger ers
e

Edit |
8 Hedge Specu Hedge Arbitr
Futures are designed primarily to assist ______ Trader 1 Delet
7 rs lator rs ager
e

Edit |
8 A high networth individual in India is keen to invest in _____with a view of rising gold
Gold Gold Euro USD GBP 1 Delet
8 prices against USD.
e

Negati Negati Positi Weeke

None Edit |
8 If INR appreciates against USD, it would _______impact gold ETF while it would vely, vely, vely, nd /
of the 1 Delet
9 _____impact the currency futures contract. positiv positiv negati Streng
above e
ely ely vely th

Intere
Liquid Monet
st Edit |
9 All of ity in ary All of
Spread movement is based on factors Rate 1 Delet
0 above Banki Policy above
Differe e
ng Decisi
ntials
Syste ons
 m (Repo,
Revers
e
Repo
and
CRR )

differe differe
same excha None Edit |
9 nt nt
Intra-currency pair spread consists same underlying and _______ maturi nge of the 1 Delet
1 maturit maturi
ties date above e
ies ties

differe
same same excha none Edit |
9 nt
Inter-currency pair spread consists different underlying and _______ maturit maturi nge of 1 Delet
2 maturi
ies ties date these e
ties

Edit |
9 Twelv
Currently currency future contracts are permitted on ______currency pairs Four Three Four Five 1 Delet
3 e
e

Refer Edit |
9 Rupee Rupee
In India all currency contract would be quoted in_________. USD GBP ence 1 Delet
4 terms terms
Rate e

Previo Edit |
9 Curren Previo Curre
New contract will be introduced following the Expiry of ________month contract. Last us 1 Delet
5 t us nt
current e

Edit |
9
In currency market final settlement will be cash settled on _______basis. T+2 T+2 T+1 T+5 T+3 1 Delet
6
e

Edit |
9 Excha Excha Trade
Daily mark to market settlement price will be announced by the ________ SEBI RBI 1 Delet
7 nge nge rs
e

Previo
Last us
Theore Theore None Edit |
9 half an day
if there is no trading in a day, the Daily settlement Price are tical tical of the 1 Delet
8 hour closin
price price above e
price g
price

Interba Interba
Merch Edit |
9 nk nk
The last working day will be the same as that for _________ in Mumbai. ant SEBI RBI 1 Delet
9 Settle Settle
Bank e
ments ments

Base price of the futures contracts on the first day are 1

1 Theore Theor Last Previo None Edit |
0 tical etical half us day of the Del
0 The price price an closing above
base hour price
price price
of the
contr
acts
Previous
on Previous Last half Edit |
Theoreti day None of
subse day closing an hour 1 Delet
cal price closing these
quent price price e
price
tradin
g
days
will
be__
____
_

There are
______entiti Edit |
2 es in the Five Three Four Two Five 1 Delet
trading e
system.

Clearing
members
Clearing Clearing Edit |
are Exchang
3 Corporat SEBI RBI Corpora 1 Delet
members of e
ion tion e
the_______
_____.

A
professional
clearing
member is a Edit |
4 clearing TRUE TRUE FALSE * . 1 Delet
member e
who is not a
trading
member.

__________
___become both of both of None of Edit |
custodian
5 professional the banks the the 1 Delet
s
clearing above above above e
members.

6 These TRUE TRUE FALSE * . 1 Edit |

clients may Delet
 trade e
through
multiple
trading
members
but settle
through a
single
clearing
member.

Which order
Edit |
are consider Day Day Stop Market Limit
7 1 Delet
as time Order Order Loss order Order
e
condition ?

In Condition
of
______parti
al match is
possible for
the order, Edit |
Stop
8 and the IOC IOC Day Limit 1 Delet
Loss
unmatched e
portion of
the order is
cancelled
immediately
.

Market
orders are
orders for
which no Edit |
9 price is TRUE TRUE FALSE * . 1 Delet
specified at e
the time the
order is
entered.

The orders
are entered
on the Edit |
Custodia
10 trading PRO CLI PRO NIST 1 Delet
l
member's e
own
account in
code as
 _______

The trading
member
enters the Edit |
Custodia
11 orders on CLI CLI PRO NIST 1 Delet
l
behalf of a e
client as
______

There are
no daily
price bands Edit |
12 applicable TRUE TRUE FALSE * . 1 Delet
for currency e
futures
contracts.

In currency
derivative
operating
ranges will
Edit |
be kept at
13 5% 4% 3% 5% 8% 1 Delet
______ for
e
contracts
with tenure
greater than
6 months.

Rules,
regulation
and bye-
laws of the
Edit |
Exchange Exchang Exchang
14 SEBI RBI FIDAI 1 Delet
govern the e e
e
functions
and
processes
by the ____

The
financial
settlement
Clearing Clearing Edit |
guarantee in Exchang
15 Corporat RBI SEBI Corpora 1 Delet
currency e
ion tion e
derivative
taken by
_______
 _______
clear and
settle their Trading Trading Professi
own trades cum Clearing Trading cum onal Edit |
16 as well as Clearing Member Member Clearing Clearing 1 Delet
trades of Member (CM) (TM) Member Member e
other (TCM) (TCM) (PCM)
trading
members.

PCM can be Edit |

17 a trading FALSE TRUE FALSE * . 1 Delet
member. e

A TM's open
position is
arrived at as
the
______of Edit |
Summati Summati Outstan
18 his Net Grossed 1 Delet
on on ding
proprietary e
open
position and
clients' open
positions.

The
maximum
allowable
Edit |
open Exchang Exchang Clearing
19 SEBI RBI 1 Delet
position limit e e Member
e
across all
members by
_____

__________
___is
Clearing Edit |
accountable Clearing Exchang Clearing
20 Corporati Dealer 1 Delet
for positions member e member
on e
of all trading
members.

Exchange
also calls for
Edit |
information
21 TRUE FALSE TRUE * . 1 Delet
directly from
e
the client
itself.
 The gross
open
position
Edit |
limits across Exchang Clearing
22 SEBI SEBI RBI 1 Delet
contracts e Member
e
have been
prescribed
by _______

The gross
open
position
limits of
client in Edit |
23 USDINR 6% 5% 7% 6% 8% 1 Delet
across e
contracts
have been
prescribed
_______

The gross
open
position
limits of non
bank trading
Edit |
member in
24 15% 14% 10% 15% 5% 1 Delet
USDINR
e
across
contracts
have been
prescribed
_______

The gross
open
position
limits of non
bank trading
Edit |
member in
25 1000 mn 1000 mn 100 mn 200 mn 500 mn 1 Delet
JPYINR
e
across
contracts
have been
prescribed
_______

26 The gross 50 mn 10 mn 20 mn 50 mn 100 mn 1 Edit |

open Delet
 position e
limits of
bank trading
member in
GBPINR
across
contracts
have been
prescribed
_______

All currency
futures
Cash None of Edit |
contracts
27 Cash Delivery Cash and the 1 Delet
are
delivery above e
_______sett
led

The
settlement
amount for Edit |
Summati
28 a CM is Netted Grossed open Netted 1 Delet
on
______acro e
ss all their
TMs/clients

Remarks :
The prices
in currency
pair is
f the
quoted in
underlying
terms of
currency
value of
pairs for
one unit of
deriving
base
prices of are
currency. Edit |
EURUSD: 63.6897/ 1.4456/1 63.6897/ 62.2546/ 1.4365/
29 While 1 Delet
1.4351 / 63.7218 .9876 63.7218 63.0576 1.9987
calculating e
1.4355;
cross rates,
USDINR:
it is
44.38 /
important
44.39. what
to keep in
is the price
mind which
of EURINR.
is the base
currency
and that
the price is
being
 calculated
for one unit
of base
currency in
terms of
quotation
currency
(also called
as term
currency).
(EUR =
1.4351 ×
44.38 =
63.6897)
(INR =
1.4355 ×
44.39 =
63.7218)

If the
underlying
currency
pairs are
GBPUSD
price as
1.6290 / 72.2950 Edit |
1.4598/1 72.2950 / 70.3465/ 1.4598/
30 1.6293 and / 1 Delet
.9956 72.3246 70.9876 1.3425
USD/ INR 72.3246 e
as 44.38/
44.39, the
price for
GBP / INR
works out to
be______

If the Remarks :
underlying You need
currency to sell INR
pairs are to buy
USDJPY USD; and
Edit |
price as further sell 53.23 / 44.8760/ 53.23 / 55.6754/ 44.23 /
31 1. Delet
83.35/ 83.37 the USD to 53.25 44.1432 53.25 56.0025 44.56
e
and USD/ buy JPY in
INR as term of
44.38/ 100JPY.
44.39, the Here base
price for currency
JPYINR are same
 works out to so need to
be _______ calculate
real value.
(buying
price 1JPY
is 44.39/
83.35 =
0.5325
INR) (
selling
price of 1
JPY is
44.38/
83.37=
0.5323) So
100 JPY
would be
53.23 /
53.25 INR

What is the
future price,
if Spot Formula
exchange are : F/ S =
rate of (1+RINR) /
Edit |
USDINR is (1+RUSD) ,
32 51.9417 50.8756 51.9417 49.9878 50.8750 1 Delet
50 and Risk F/ 50 =
e
free interest (1+.07) /
rate for one (1+.03), =
year in USA F= 51.9417
is 3% and in
India is 7%.

F=S× F=S/
F=S× F = (1 +
(1 + (1 +
Forward (1 + RQC F = S × RQC ×
RQC × RQC × Edit |
price equal × Period) (1 + Period)
33 Period) / Period) / 1 Delet
to / (1 + RQC × / (1 +
(1 + (1 + e
_________ RBC × Period) RBC ×
RBC × RBC ×
Period) Period)
Period) Period)

If 6 month First we
interest rate convert
Edit |
in India is interest
34 52 50 54 52 57`` 1 Delet
10% per rate per
e
annum and annum to
in USA are half yearly,
2% per bcoz future
 annum . price
The current calculate 6
USDINR month.
spot rate is Interest
50. What is rate are
the likely 6 India
month 10/2=5 and
USDINR in USA
futures 2/2=1. Now
price? formula are
:F=S+
(RINR-
RUSD)*S
50+ (5-1)
×50 = 50+2
= 52

If the spot
rate for
USDINR is
quoted @
Rs. 44.80
and one
month
forward is
quoted
45.10 while
at the same Sells in Sells in Sells in
Buy in Buy in Edit |
time one futures futures forward
35 futures forward 1 Delet
month @ 45. @ 45. @
@ 45.25 @ 45.10 e
currency 25 25 45.10
futures is
trading @
Rs. 45.25.
An active
arbitrager
realizes that
there is an
arbitrage
opportunity_
________

If the spot In the

rate for process, he Edit |
Gain Loss Gain Gain
36 USDINR is makes a Loss 150 1 Delet
150 250 150 250
quoted @ Net Gain of e
Rs. 44.80 45. 25 –
and one 45.10 = Rs
 month 0.15 or 15
forward is paise per
quoted USD i.e.
45.10 while approx 15
at the same paise
time one arbitrage.
month This results
currency into a profit
futures is per
trading @ contract of
Rs. 45.25. Rupees
An active 150
arbitrager (=0.15x100
realizes___ 0).
___

A person The value

has of
invested investment
USD increased
100,000 in from USD
US equities 100,000 to
with a view USD
of 115,000 in
appreciation one year.
of US stock Therefore
market. In the return
next one in USD
year, his would be:
investments (115,000 -
in US 100,000)/1 Edit |
15% , 10% , 15% , 7.06% , 10% , 5
37 equities 00,000 = 1 Delet
7.6% 7% 7.6% 10% %
appreciated 0.15 and in e
in value to percentage
USD terms it
115,000. would be
The investor 15%. In
decided to INR terms,
sell off his the value of
portfolio and investment
repatriate at the
the capital beginning
and profits was
to India. 4,700,000
However, at and at
the time of maturity it
converting is
USD to INR, 5,060,000
 he received (44 x
an 115,000).
exchange Therefore
price of 44 the return
as against in INR is:
47. What is (5,060,000
the return of –
USD and 4,700,000)/
INR ? (4,700,000)
= 0.076
and in
percentage
terms it
would be
7.6%

A person The value

has of
invested investment
USD increased
100,000 in from USD
US equities 100,000 to
with a view USD
of 115,000 in
appreciation one year.
of US stock Therefore
market. In the return
next one in USD
year, his would be:
investments (115,000 -
in US 100,000)/1 Edit |
38 equities 00,000 = 22% 10% 22% 25% 24% 1 Delet
appreciated 0.15 and in e
in value to percentage
USD terms it
115,000. would be
The investor 15%. In
decided to INR terms,
sell off his the value of
portfolio and investment
repatriate at the
the capital beginning
and profits was
to India. 4,700,000
However, at and at
the time of maturity it
converting is
USD to INR, 5,750,000
 he received (50 x
an 115,000).
exchange Therefore
price of 50 the return
as against in INR is:
47. What is (5,750,000
the return of –
INR ? 4,700,000)/
(4,700,000)
= 0.22 and
in
percentage
terms it
would be
22%

One year
interest rate
is 4% in US
and 1% in
UK. If
current
f=s+(Rus-
GBPUSD
Ruk)*s
spot rate is Edit |
f=1.65+(4%
39 1.65, which 1.6995 1.6995 1.6005 1.7325 1.6500 1 Delet
-1%)*1.65
of the e
1.65+0.049
following
5 1.6995
could be
closest to
one year
future rate
of
GBPUSD?

If one year
interest rate
is 2% in US
6 month
and 10% in
interest
India. If
rate are us
current Edit |
= 2/2 = 1%
40 USDINR 45.76 42.24 45.76 47.52 40.48 1 Delet
ind
spot rate is e
10/2=5% f=
44, which of
44+(5-
the following
1)*44 45.75
could be
closest to
the six
month
 future rate
of USDINR?

An exporter
sells 10 lots
of one
month
EURINR
futures at
sell = 63
63. At the
buy = 63.70
expiry, the
loss = 0.70 Edit |
settlement loss of loss of loss of profit profit of
41 loss = 1 Delet
price was 7000 7000 700 700 7000
0.70*10*10 e
announced
00 loss =
as 63.70.
7000
How much
profit/loss
(in Rupees)
did he make
on the
transaction?

A trader in
India
expects
international
gold prices
to
appreciate
from USD
1500 per
ounce to
USD 1800
in next six 18 15 Edit |
15 lots, 15 lots, 18 lots,
43 months. To lots,13.6 lots,13 1 Delet
13.6% 13.6% 12%
benefit from % % e
the view, he
buys 30
grams of
gold at
Rupees
22,000 per
gram and
also sold 6
month
USDINR
futures at
44

45

46

A TRADING
MEMBER
(TM) HAS
TWO9
CLIENTS A
AND B AND
HE ALSO
DOES
PROPRIET
ARY
TRADING
IN
CURRENC
Y
FUTURES.
ON DAY 1
TM BUYS 8
TM = +8-
LOTS OF
2=6 A= +8-
USD INR
2=6 B= +2-
ONE 18000,6 18000,6 18000,6 Edit |
8=6 LOT ZERO,60 8000,60
47 MONTH 000,600 000,600 000,700 1 Delet
SIZE 000,6000 00,6000
FUTURES 0 0 0 e
(1000)
AND ALSO
18000,600
SELLS 2
0,6000
LOT OF
THE SAME
CONTRACT
ON THE
SAME DA;Y
IN HIS
PROPRIET
ARY BOOK
ON THE
SAME DAY
CLIENT A
BUY 8LOT
OF USD
INR ONE
MONTH
FUTURES
AND ALSO
SELLES 2
 LOT OF
THE SAME
CONTRACT
EHILE
CLIENT B
SELLS 8
LOTS AND
BUYS 2
LOT WHAT
WOULD BE
THE OPEN
POSITION
(IN USD)
OF THE
TRADING
MEMBER,
CLIENT A
AND
CLIENT B
RESPECTI
VELY AT
THE END
OF THE
DAY 1 ?

A client
buys a USD
call option
CALL
at strike of
BREAK
45.5 and
EVEN =
pays a Edit |
STRIKE
48 premium of 45.8 45.8 45.2 45.3 46.2 1 Delet
PRICE +
INR 0.3. e
PREMIUM
What would
= 45.5+.03
be the
=45.8
breakeven
point for the
transaction?

A client sells 45.8+0.3

a USD call =46.1
option at NOTE- IN
Edit |
strike of CASE
49 46.1 45.2 46.1 45.8 46.2 1 Delet
45.8 and PUT,
e
receives a PREMIUM
premium of MINUS (-)
INR 0.3. FROM
What would STRIKE
 be the PRICE
breakeven
point for the
transaction?

CLIENT 1 = 2000
- short for
5000+0=50 currenc
00 CLIENT y
2=- futures Edit |
11000 4000 20000 11000
50 0+4000=40 and 1 Delet
USD USD USD USD
00 CLIENT 2000 e
3=- long for
0+2000=20 currenc
00 TOTAL y
= 11000 options

CLIENT 1 =
-
2000
6000+3000
short for
=3000
currency
CLIENT 2 =
futures No Edit |
- 9000 12000 9000
51 and open 1 Delet
6000+3000 USD USD USD
2000 position e
=3000
long for
CLIENT 3 =
currency
-0+3000
options
TOTAL =
90000

WE CAN
BUY
Edit |
CONTRAC
52 0.27 0.27 0.25 0.23 0.29 1 Delet
T WITH
e
ASK
PRICE

BUY PUT
@ 0.55
SELL CALL
@ 0.71
CALL = None of Edit |
Profit of Profit of Loss of Profit of
53 CMP - SP the 1 Delet
INR 0.91 INR 0.15 INR 0.96 INR 0.91
= IN IS above e
OTM CAL
PROFIT =
0.71 PUT =
SP - CMP
= 45.5 -
 44.75 =.75
NET
PROFIT
0.75-0.55 =
0.2 TOTAL
PROFIT =
0.71+0.20
= 0.91

Future price
is equal to
the interest
Edit |
rate
54 TRUE FALSE TRUE * . 1 Delet
difference
e
between
two
currencies.

The
maximum
loss limit,
allows a
member to Edit |
55 sustain on a 75% 50% 65% 75% 90% 1 Delet
real-time e
basis, is
____ of the
total
deposit.

In currency
derivative
every time
60%, 50%, 60%, 60%, 50%, Edit |
loss amount
56 75%, or 60%, or 75%, or 80%, or 65%, or 1 Delet
goes
90% 75% 90% 90% 85% e
beyond the
levels of
_______

when the
loss crosses
the 75% of
Edit |
the total Suspend Suspend Block Cancel
57 Block 1 Delet
deposit limit, ed ed Order Orders
e
the member
is ______by
the system.
 The
financial
soundness
of the Edit |
58 members is TRUE FALSE TRUE * . 1 Delet
the key to e
risk
managemen
t.

Upfront
initial
margin is Clearing Edit |
Clearing Trading Clearing Exchang
59 charged for Corpora 1 Delet
Member member Member e
all the open tion e
positions of
a _______

In currency
derivative
Clearing Edit |
trading Clearing Trading Exchang Clearing
60 Corporat 1 Delet
member Member member e Member
ion e
limit set by
______

Separate
settlement
guarantee
funds for Clearing Edit |
Exchang Trading Exchang Clearing
61 this Corporati 1 Delet
e member e Member
segment on e
have been
created by
______.

which
margin use
by
None of Edit |
exchange Initial
62 SPAN VaR SPAN the 1 Delet
for compute Margin
above e
on-line risk
managemen
t system .

which
None of Edit |
margin use Initial
63 SPAN VaR SPAN the 1 Delet
by Margin
above e
exchange
for compute
 on-line risk
managemen
t system .

SPAN
compute on-
line
margins,
Clearing Edit |
based on Exchang Clearing
64 SEBI SEBI Corporat 1 Delet
the e Member
ion e
parameters
defined by
¬¬¬¬_____
___

initial
margin
charge for Edit |
65 the purpose TRUE FALSE TRUE * . 1 Delet
of allowable e
exposure
limits.

Value at
Risk (VaR)
based on a
worst case Edit |
One Three Five
66 loss of a One day One day 1 Delet
week day day
portfolio as e
to cover a
99% over a
___ horizon.

The
minimum
margin
Edit |
required for
67 1% 1% 5% 7% 3% 1 Delet
currency
e
pair
USDINR___
___

The
minimum
Edit |
margin
68 4.5% 1.2% 3.2% 4.5% 4.0% 1 Delet
required on
e
first day for
currency
pair
 JPYINR___
___

The
minimum
margin
Edit |
required for
69 2% 2% 3% 1% 4% 1 Delet
currency
e
pair
GBPINR___
___

The
minimum
margin
required on Edit |
70 first day for 2.8% 1.2% 2.8% 3.2% 4.5% 1 Delet
currency e
pair
EURINR___
___

SPAN
methodolog
y is adopted
None of Edit |
the risk Individua Trading Clearing Individua
71 the 1 Delet
involved in l client Member Member l client
above e
the portfolio
of each
________.

The client-
wise margin
is grossed
across None of Edit |
Trading Clearing Individual Trading
72 various the 1 Delet
Member Member client Member
clients at above e
the
________le
vel.

The
proprietary
positions of Edit |
Trading Clearing Trading All of
73 the Trading Client 1 Delet
Member Member Member above
/ Clearing e
Member are
treated as
that of a
 ______

The
Exchange
updates real
time margin
computation Edit |
74 the scenario 5 2 4 8 5 1. Delet
contract e
values at
least ___
times in the
day.

A currency
futures
position at
one maturity
which is
Edit |
hedged by Calenda Arbitrag Hedgegin Calenda Specula
75 1 Delet
an offsetting r spread e g r spread tion
e
position at a
different
maturity is
treated
as______.

The
calendar
spread
margin for Edit |
76 USDINR 400 400 500 200 100 1 Delet
one month e
contract
are_______
_

The
calendar
spread
margin for Edit |
77 GBPINR 1800 1800 1700 1400 1500 1 Delet
two month e
contract
are_______
_

78 The 1500 1400 1200 1500 1600 1 Edit |

calendar Delet
 spread e
margin for
JYPINR six
month
contract
are_______
_

The
calendar
spread
margin for Edit |
79 EURINR 700 500 400 700 100 1 Delet
one month e
contract
are_______
_

The
calendar
spread
margin for Edit |
80 EURINR 1000 400 1000 5000 2200 1 Delet
two month e
contract
are_______
_

The
extreme
Edit |
loss margin
81 0.3% 0.3% .5% .05% .010% 1 Delet
charge on
e
EURINR are
_______

The
extreme
Edit |
loss margin
82 0.5% .05% .022% 0.5% .04% 1 Delet
charge on
e
GBPINR are
_______

The initial
margin and
None of Edit |
the extreme Clearing Trading Individual Clearing
83 the 1 Delet
loss margin Member Member client Member
above e
are
deducted
from the
 liquid assets
of the
______

The clearing
member’s
liquid
networth
after
adjusting for
Edit |
the initial Rs. 50 Rs.100 Rs. 50 Rs. 5 Rs. 75
84 1 Delet
margin lacs lacs lacs crore lacs
e
requirement
s must be at
least
______at all
points in
time.

The mark-
to-market
gains and
losses are
settled in
cash before Edit |
85 the start of TRUE FALSE TRUE * . 1 Delet
trading on e
T+1 day,
before start
of the next
day’s
trading.

The client
margins are
compulsorily
collected
Clearing Edit |
and Exchang Exchang Clearing
86 SEBI Corporat 1 Delet
reported to e e Member
ion e
the
______by
the
members.

The
Edit |
Clearing six One Three six one
87 1 Delet
Corporation months month month months year
e
of the
Exchange,
 take
periodic risk
evaluation
report on an
ongoing
basis and at
least once
in every
_______

A copy of
the study is
submitted to
_____along
with Clearing Edit |
Exchang Clearing
88 suggestions SEBI SEBI Corporat 1 Delet
e Member
on changes ion e
to the risk
containment
measures
(imp)

_________p
ermitted
introduction Edit |
SEBI & SEBI & Exchang
89 of USDINR SEBI RBI 1 Delet
RBI RBI e
options on e
stock
exchange.

NSE & NSE &

Option USE USE
Edit |
trading are (United (United
90 BSE NSE USE 1 Delet
available on Stock Stock
e
_______ Exchang Exchan
e) ge)

the right to
sell the Edit |
put Call put
91 asset is Future Forward 1 Delet
option. option option.
called e
_______

The
difference None of Edit |
time to time to Settleme
92 between the Trading the 1 Delet
maturity maturity nt
date of above e
entering into
the contract
 and the
expiration
date is
called_____
_

the party
which sells
the right and
receives
Edit |
premium for seller/ seller/ arbitrag
93 buyer hedger 1 Delet
assuming writer writer er
e
such
obligation is
called
option___

options, the
buyer has Edit |
94 only rights TRUE FALSE TRUE * . 1 Delet
and no e
obligation.

Option
Edit |
buyer faces
95 TRUE FALSE TRUE * . 1 Delet
only the risk
e
of premium.

________all
owed banks
to offer
None of Edit |
foreign
96 RBI SEBI FEDAI RBI the 1 Delet
currency-
above e
INR
European
options

The
exchanges
started Novemb Novemb Novembe March Edit |
January
97 trading in er 10, er 10, r 30, 30, 1 Delet
10, 2008
currency 2010. 2010. 2011. 2009 e
options from
______

Index Edit |
98 (European) TRUE FALSE TRUE * . 1 Delet
options can e
be
 exercised
by the buyer
of the option
only on the
expiration
date

In India, all
the currency
options in None of Edit |
Europea America Europea
99 OTC market Indian the 1 Delet
n n n
are of above e
_______typ
e.

Stocks
(American)
options can
be
exercised
Edit |
100 by the buyer TRUE FALSE TRUE * . 1
Del
any time on
or before
the
expiration
date.

Currently American options

1 are not allowed in TRUE FALSE TRUE * . 1 Edit | Delete
currencies in India.
 Higher the volatility,
2 _______is the option Higher Lower Higher Both the above None of these 1 Edit | Delete
premium.

If the interest rate

differential increase the
value of call option
3 TRUE FALSE TRUE * . 1 Edit | Delete
increases and value of put
option decreases and vice
versa. (imp)

The Greeks indicate the

price ______ of option to
change in price None of the
4 sensitivity Volatility liquidity sensitivity 1 Edit | Delete
determinant, they are used above
for risk assessment and
management.

Delta It is the rate of

None of the
5 change of option price with Underlying asset. Future Underlying asset. Cash Market 1 Edit | Delete
above
respect to the price of the

_______It measures the

rate of change of option
6 Vega Delta Rho Vega Theta 1 Edit | Delete
value to volatility of price of
the underlying asset.

______It measures
7 sensitivity of option value to Rho Delta Rho Theta Vega 1 Edit | Delete
the risk free interest rate.

_____methodology use to
compute and is mainly None of the
8 Black and Scholes Binomial pricing Black and Scholes Standard Devition 1 Edit | Delete
used to price European above
options.

_____methodology use to
compute and is mainly Black and Standard None of the
9 Binomial pricing Binomial pricing 1 Edit | Delete
used to price American Scholes Deviation above
options.

In vanilla option the

10 strategy use ______ Four Two Five Four Three 1 Edit | Delete
option.

. You want to earn a return

from the expected range
11 Short Strangle Short Straddle Short Strangle Vanilla Long Butterfly 1 Edit | Delete
bound market, use ______
Short Strangle
 Short Straddle use to
achieve the same objective ATM put and ATM ATM put and OTM Call and
12 OTM Call ATM Put 1 Edit | Delete
by designing a more risky call. ATM call. OTM put
strategy by selling ____

In ________strategy the
13 losses are limited and long butterfly Short Straddle long butterfly Short Strangle Vanilla 1 Edit | Delete
known in advance.

Long Strangle: You buy

14 one OTM call and one TRUE FALSE TRUE * . 1 Edit | Delete
OTM put for same maturity.

On expiry date, all open

long in-the-money
15 contracts would be TRUE FALSE TRUE * . 1 Edit | Delete
automatically exercised at
the final settlement price.

._____ has prescribed

Clearing Clearing
16 margins to be collected for SEBI Exchange SEBI 1 Edit | Delete
corporation Member
USDINR options

In currency open short

17 position, the extreme loss 1.5% 1% 3% 1.5% 2.5% 1 Edit | Delete
margin are ______

In Calendar Spread Margin

would be calculated on the
18 Delta Gama Theeta Delta Rho 1 Edit | Delete
basis of _____of the
portfolio in each month.

.________ has issued

guidance notes on
19 ICAI SEBI Exchange ICAI AMFI 1 Edit | Delete
accounting of index futures
contracts.

Any cash lay out on

account of initial margin or
mark to market has to be
20 _____to respective heads Debited Deposit Credited Debited Submitted 1 Edit | Delete
i.e., Initial margin-currency
futures or Mark to market-
currency futures.

At the balance sheet date,

Current
21 any debit balance in “Initial Current Asset Liabilities Asset Current Asset 1 Edit | Delete
Liabilities
margin-currency futures”
has to be shown as under
 ______

On balance sheet date,

credit balance in “Mark to Current
22 Current Liabilities Liabilities Asset Current Asset 1 Edit | Delete
market- currency futures” Liabilities
has to be shown as a__

At the balance sheet date

should be disclosed
23 TRUE FALSE TRUE * . 1 Edit | Delete
separately for long and
short positions.

income or loss on
derivative transactions
which are carried out in a
24 “recognized stock TRUE FALSE TRUE * . 1 Edit | Delete
exchange” is not taxed as
speculative income or loss.
(imp)

The loss on derivative

transactions can not be set
25 FALSE TRUE FALSE . * 1 Edit | Delete
off against any other
income during the year.

losses can be carried

26 forward for a period of 8 5 7 8 9 1 Edit | Delete
______ assessment years

_______Account
The Committee
Convertibility had The Committee on
27 SEBI Govt. of India RBI on Fuller 1 Edit | Delete
recommended that Fuller Capital
Capital
currency futures

A derivative security
28 derived can be a debt TRUE FALSE TRUE * . 1 Edit | Delete
instrument.

A derivative security
derived can not be a
29 TRUE FALSE TRUE * . 1 Edit | Delete
interest rate or loan
instrument

To coordinate the
regulatory roles of _____in The Committee
30 regard to trading of RBI SEBI Govt. of India RBI on Fuller 1 Edit | Delete
Currency Futures on the Capital
Exchanges

31 RBI SEBI Govt. of India RBI 1 Edit | Delete

Currency futures are The Committee
 permitted may be approved on Fuller
by the ¬¬¬¬_____from Capital
time to time.

Only ‘persons resident in

32 India’ may purchase or sell TRUE FALSE TRUE * . 1 Edit | Delete
currency futures.

The membership of the

currency futures market of
a recognised stock
33 exchange shall be separate FALSE TRUE FALSE * . 1 Edit | Delete
from the membership of the
equity derivative segment
or the cash segment

Bank are permitted to

become trading and
clearing members of the
34 TRUE FALSE TRUE . * 1 Edit | Delete
currency futures segment
with maximum networth
Rs.500 crores.

Bank are permitted to

become trading and
clearing members of the
35 3% 3% 4% 7% 6% 1 Edit | Delete
currency futures segment
with net NPA should not
exceed ___

Bank are permitted to

become trading and
clearing members of the
36 3 4 5 3 7 1 Edit | Delete
currency futures segment
with net profit for last
_____year

For currency trading

exchange shall have a
37 100 crores 10 crores 100 crores 100 Lakh 50 crore 1 Edit | Delete
balance sheet networth of
at least Rs._____

For start currency trading

38 exchange shall have at TRUE FALSE TRUE * . 1 Edit | Delete
least 50 members.

A Clearing Corporation in
39 the currency futures SEBI RBI FADI SEBI Exchange 1 Edit | Delete
segment can function only
after obtaining
 _____approval.

The Clearing Corporation

should be a company The Companies The Companies
40 Pvt. Company SCRA, 1956 RBI 1 Edit | Delete
incorporated under Act, 1956 Act, 1956
_________

The currency futures

segment of the Exchange
41 should have a separate 25% 25% 10% 50% 15% 1 Edit | Delete
Governing Council should
not exceed______.

____ of the public

representatives on the
Governing Council of the
currency futures segment
42 50% 25% 10% 50% 15% 1 Edit | Delete
can be common with the
Governing Council of the
cash/equity derivatives
segments of the Exchange.

The membership of the

Currency Derivatives
43 Segment shall be separate TRUE FALSE TRUE * . 1 Edit | Delete
from the membership of the
Equity Derivative Segment.

Currency Derivative
membership subject to the
44 SEBI RBI Government SEBI Exchange 1 Edit | Delete
regulatory norms and
provisions of _____

The trading members and

sales persons in the
currency futures market
45 must have passed a SEBI RBI Exchange SEBI Government 1 Edit | Delete
certification program which
is considered adequate
by_____

FIIs and NRIs would not be

46 permitted to participate in TRUE FALSE TRUE * . 1 Edit | Delete
currency futures market.

Authorized persons can

47 operate the trading TRUE FALSE TRUE * . 1 Edit | Delete
workstation(s).
 Authorized Persons receive
48 a ______from the trading Commission Allowance Fixed Salary Employment Commission 1 Edit | Delete
member.

A broker should
_______inform his client Promptly or Promptly or None of the
49 T+1day T+2 day 1 Edit | Delete
about the execution or non- emmiditaly emmiditaly above
execution of an order.

A broker should issue

without delay within
50 24 hours 48 hours T+1 Day 24 hours T+2 Day 1 Edit | Delete
¬¬¬¬______ to his client or
client of sub-broker.

A broker can encourage

sales or purchases of
51 securities with the sole FALSE TRUE FALSE * . 1 Edit | Delete
object of generating
brokerage or commission.

A broker should not deal or

transact business for a
client who has failed to
52 TRUE FALSE TRUE * . 1 Edit | Delete
carry out his commitments
in relation to securities with
another broker.

A broker should not make a

recommendation to any
client who might be
53 TRUE FALSE TRUE . * 1. Edit | Delete
expected to rely thereon to
acquire, dispose of, retain
any securities.

A sub-broker should issue

promptly to his clients
Purchase or sale Purchase or sale Confirmation None of the
54 _______for all the Contract note 1 Edit | Delete
notes notes memo above
transactions entered into
by him with his clients.

A sub-broker should enter

into a _______ with his Tripartite Mutual Saprate Tripartite Common
55 1 Edit | Delete
client for trading of agreement Agreement Agreement agreement Agreement
currency derivative.

The arbitrator conducts the

arbitration proceeding and
56 Four months Two month One week Four months Six Month 1 Edit | Delete
passes the award normally
within a period of
_______from the date of
 initial hearing. (imp)

The arbitration award is

57 TRUE FALSE TRUE * . 1 Edit | Delete
binding on both the parties.

the aggrieved party, within

58 ______of the receipt of the fifteen days Saven days two month fifteen days six month 1 Edit | Delete
award from the arbitrator.

Any party who is

dissatisfied with the
59 Appellate Bench Award Court of Law. SEBI Exchange Court of Law. SAT 1 Edit | Delete
may challenge the same
only in _____

As stipulated by SEBI, the

Trading Member maximum
60 brokerage that can be 2.5% 2.5% 1% 1.5% 2% 1 Edit | Delete
charged is ____ of the
contract price.

Which term best describes

61 Free floating Pegged to gold Free floating Pegged Pegged to USD 1 Edit | Delete
EUR currency?

Exchange rates
Base currency is Quotation
Base currency is Base currency is are quoted in
Which of the following is the second currency is the
62 the first currency the first currency per unit of 1 Edit | Delete
true? currency in a first currency in a
in a currency pair in a currency pair quotation
currency pair currency pair
currency

As a trader you believe

EURUSD will move from
1.38 to 1.44 in next 2
months. Which of the Long EURINR, Long EURINR, Short EURINR,
63 Long EURINR Short EURINR 1 Edit | Delete
following would you do to Short USDINR Short USDINR Long USDINR
execute this view using
currency futures contract of
EURINR and USDINR?

As a trader you believe

GBPUSD will move from
1.63 to 1.68 in next 2
months. Which of the Long GBPINR, Long GBPINR, Short GBPINR,
64 Long GBPINR Short GBPINR 1 Edit | Delete
following would you do to Short USDINR Short USDINR Long USDINR
execute this view using
currency futures contract of
GBPINR and USDINR?

65 An international trading USD depreciating USD appreciating USD appreciating USD depreciating USD 1 Edit | Delete
company has export against GBP; against GBP; against GBP; against GBP; depreciating
 revenue in USD and it uses Short USDINR Short GBPINR Short USDINR Short GBPINR against GBP;
part of it to make import and long GBPINR and long USDINR and long GBPINR and long USDINR Short USDINR
payments in GBP and for same maturity for same maturity for same maturity for same maturity and long
balance is converted to GBPINR for
INR. The company is same maturity
concerned about GBPUSD
risk for its import payments.
Which of the following best
describes company's risk
and the currency futures
strategy that it may use to
mitigate the risk?

A trader executes following

currency futures trade:
JPY
buys one lot of USD/INR, JPY weakening JPY weakening INR strengthening INR weakening
66 strengthening 1 Edit | Delete
sells one lot of JPY/INR. against USD against USD against USD against JPY
against USD
What view has he
executed?

If you expect USDINR spot

value to remain stable over
next one month and also
Selling long
expect forward premium
term USDINR
with USD at premium to
Buying USDINR Buying USDINR Selling USDINR Selling USDINR futures and
67 INR to continue expect the 1 Edit | Delete
futures futures OTC forward futures buying short
future value of INR at a
term USDINR
discount to USD to
futures
continue, what trade
position could result in
losses?

Which of the following best

describes the total open
Total open Total open Total open Minimum open
interest which is used for None of the
68 interest at end of interest at the interest at end of interest in the 1 Edit | Delete
the purpose of monitoring above
previous day time of monitoring previous day previous day
of open position during the
day?

Which of the following best 5% of open

6% of open 5% of open 6% of open 4% of open
describes the SEBI interest or EUR
interest or EUR 5 interest or EUR 5 interest or EUR 5 interest or EUR 5
69 prescribed open position 10 million, 1 Edit | Delete
million, whichever million, whichever million, whichever million, whichever
limit for EURINR contracts whichever is
is higher is higher is higher is higher
for a client? higher

Which of the following acts None of the

70 SC(R)A, 1956 FEMA, 1999 SC(R)A, 1956 SEBI Act 1 Edit | Delete
is mainly responsible for above
governing the securities
 trading in India?

Which of the following

Any corporate not
segments of market
having exposure None of the
71 participants are not allowed NRIs Trusts NRIs 1 Edit | Delete
to foreign above
to trade in currency
currency
futures?

What is the minimum net

worth for a company for it
to be eligible for applying to
72 Rs 100 crore Rs 200 crore Rs 100 crore Rs 50 crore Rs 75 crore 1 Edit | Delete
become an authorized
exchange for currency
futures?

Which of the following

organizations issues
73 ICAI ICSI ICWAI ICAI IIM 1 Edit | Delete
guidelines for accounting of
currency futures contracts?

Initial margin -
What are the basic Initial margin -
currency
accounting heads to be currency futures
Mark to market - Profit and Loss - Initial margin - futures and
74 maintained by any market and Mark to 1 Edit | Delete
currency futures currency futures currency futures Mark to market
participant for maintaining market - currency
- currency
currency futures accounts? futures
futures

Intimate the Intimate the Promptly

Which of the following best Promptly intimate Intimate the
execution or non- execution or non- intimate the
describes the guidelines for the execution or execution or non-
75 execution within execution within execution or 1 Edit | Delete
brokers with respect to non-execution of execution by the
two hour of deal three hour of deal non-execution
execution of client orders? the order end of the day
execution execution of the order

Broker should
have a
Broker should Broker should Broker should
Which of the following best Broker should separate audit
promptly issue promptly issue ensure that his
describes the guidelines for make guidelines team which
contract notes to contract notes to sub-brokers issue
76 brokers with respect to for his sub- inspects the 1 Edit | Delete
his clients and his clients and contract notes
issuing of contract notes for brokers to issue process of
clients of his sub- clients of his sub- every week to
execution of orders? contract notes issuing contract
brokers brokers their clients
notes at all his
sub-brokers

An employee of a broking Employee to also Employee to also Employee to also

house has started giving disclose the disclose the share technical
Employee to be None of the
77 advice on taking trading proprietary proprietary analysis to 1 Edit | Delete
presentable above
position on USDINR interest, including interest, including support currency
currency futures on TV. long and short long and short view
Which of the following best position, of position, of
 describes the steps that broking house in broking house in
broking house needs to USDINR currency USDINR currency
take to ensure that its futures contracts futures contracts
employee complies with
guidelines?

Tripartite
Tripartite Tripartite
Bipartite Bipartite agreement
Which of the following best agreement agreement
agreement agreement between him,
describes the guidelines between him, between him,
between him and between him and broker and his
with respect to nature of broker and his broker and his
78 his client clearly his client clearly client clearly 1 Edit | Delete
agreement that a sub- client clearly client clearly
specifying the specifying rights specifying the
broker has to execute with specifying rights specifying rights
brokerage to be and obligations of rights of broker
his clients? and obligations of and obligations of
charged each party but not his
each party each party
obligations

One of the key difference in

Requirement of
OTC and Exchange traded
proof of
79 USD-INR currency option Both (b) and (c) Lot size Market timings Both (b) and (c) 1 Edit | Delete
underlying FX
market is related to
transaction
___________.

For a person who is trading

in both currency futures
and currency options, the
80 open interest would be TRUE FALSE TRUE * . 1 Edit | Delete
monitored for combined
gross positions in futures
and options.

An active trader in currency

options market wants to
execute his view on
change in volatility over a
81 period of time and wants to Calendar spread Calendar spread Short option Long option Covered call 1 Edit | Delete
be insulated from changes
in other factors impacting
option pricing. What option
strategy is he likely to use?

Possible, if he
can give to the
In OTC currency derivative
bank a copy of
market in India, is it
underlying trade None of the
82 possible for a corporate to Not possible Not possible Possible 1 Edit | Delete
transaction above
write an option and receive
against which
a net premium?
option has been
written
 If the underlying currency
pairs for deriving prices of
are EURUSD: 1.4351 /
83 63.6897/63.7218 62.2546/63.0576 63.6897/63.7218 1.4456/1.9876 1.4365/1.9987 1 Edit | Delete
1.4355; USDINR: 44.38 /
44.39. what is the price of
EURINR.

If the underlying currency

pairs are GBPUSD price as
1.6290 / 1.6293 and USD/
84 72.2950 / 72.3246 1.4598/1.9956 70.3465/70.9876 72.2950 / 72.3246 1.4598/1.3425 1 Edit | Delete
INR as 44.38/ 44.39, the
price for GBP / INR works
out to be______

If the underlying currency

pairs are USDJPY price as
83.35/ 83.37 and USD/ INR
85 53.23 / 53.25 44.8760/44.1432 53.23 / 53.25 55.6754/56.0025 44.23 / 44.56 1 Edit | Delete
as 44.38/ 44.39, the price
for JPYINR works out to be
_______

What is the future price, if

Spot exchange rate of
USDINR is 50 and Risk
86 51.9417 50.8756 51.9417 49.9878 49.4536 1 Edit | Delete
free interest rate for one
year in USA is 3% and in
India is 7%.

F = S × (1 + RQC F = S × (1 + RQC F = S / (1 + RQC F = (1 + RQC ×

Forward price equal to F = S × (1 + RQC
87 × Period) / (1 + × Period) / (1 + × Period) / (1 + Period) / (1 + 1 Edit | Delete
_________ × Period)
RBC × Period) RBC × Period) RBC × Period) RBC × Period)

If 6 month interest rate in

India is 10% per annum
and in USA are 2% per
88 annum . The current 52 58 72 74 52 1 Edit | Delete
USDINR spot rate is 50.
What is the likely 6 month
USDINR futures price?

If the spot rate for USDINR

is quoted @ Rs. 44.80 and
one month forward is
Sells in
quoted 45.10 while at the Sells in futures @ Buy in futures @ Buy in forward @ Sells in futures @
89 forward@ 1 Edit | Delete
same time one month 45. 25 45.25 45.10 45. 25
45.10
currency futures is trading
@ Rs. 45.25. An active
arbitrager realizes that
there is an arbitrage
 opportunity_________

If the spot rate for USDINR

is quoted @ Rs. 44.80 and
one month forward is
quoted 45.10 while at the
90 Gain 150 Loss 250 Loss 150 Gain 150 Gain 250 1 Edit | Delete
same time one month
currency futures is trading
@ Rs. 45.25. An active
arbitrager realizes______

A person has invested

USD 100,000 in US
equities with a view of
appreciation of US stock
market. In next one year,
his investments in US
equities appreciated in
value to USD 115,000. The
91 investor decided to sell off 15% , 7.6% 10% , 7% 7.06% , 10% 15% , 7.6% 10% , 5 % 1 Edit | De
his portfolio and repatriate
the capital and profits to
India. However, at the time
of converting USD to INR,
he received an exchange
price of 44 as against 47.
What is the return of USD
and INR ?

The documented
interest None of Edit | Dele
1 of history gold Commodity gold 1
rate These te
countries was
agreed to value
 their currencies
against value of
currency of other
country using
________as the
benchmark for
valuation?

The value of each

currency against gold Interest gold Commodity
None of Edit | Dele
2 another currency exchange rate exchange exchange 1
the above te
was derived from rate. exchange rate. rate
___________ ?

The exchange of
Edit | Dele
3 two currencies is FX SX CNX STT FX 1
te
called?

For exchange
Bretton
currency the Bretton Bombay Bretton Delhi
Butter and Edit | Dele
4 countries adopted Woods Woods Woods Commodity 1
egg te
a system called System System System Exchange
system
___________.

As part of the
system, all
currencies were
USD,pegg Pegged,U USD,pegg Edit | Dele
5 pegged to ____ at EUR,USD GBP,EUR 1
ed SD ed te
a fixed rate and
USD value was
____ to gold.

. ____ became the

Edit | Dele
6 dominant currency USD GBP EUR JYP USD 1
te
of the world.

Which method free free Market

Commodity None of Edit | Dele
7 follow for valuation floating floating capitalizati 1
exchange the above te
of currencies? method method on method

The share of USD

Edit | Dele
8 JPY pairs in daily 14% 12% 14% 10% 5% 1
te
trading volume is

Which is the
“vehicle” currency
Edit | Dele
9 in foreign US Dollar EUR Euro Dollar US Dollar JYP 1
te
exchange
transaction?
 which currency
Edit | Dele
10 second only to the EUR JPY GBP CAD EUR 1
te
US Dollar?

______is very
liquid around the Edit | Dele
11 JYP USD EUR CAD JYP 1
world, practically te
around the clock

The nickname
_____ is derived
None of Edit | Dele
12 from the telegrams Cable Kent Chicago Cable 1
the above te
used to update the
GBPUSD.

Currency market,
the concept of a
Edit | Dele
13 24-hour market TRUE FALSE TRUE * . 1
te
has become a
reality.

Currency market,
the concept of a
Edit | Dele
14 24-hour market TRUE FALSE TRUE * . 1
te
has become a
reality.

Australia currency
UK and US UK and US Edit | Dele
15 market open after Japan India Europe 1
Market Market te
the____

In the______,
nearly two-thirds
of the day‟s New York New York Europe Edit | Dele
16 US Market India 1
activity typically market market Market te
takes place in the
morning hours.

As per Bank for

International
Settlements (BIS)
survey of April
2010, daily USD USE 2.5 USD Edit | Dele
17 USD 1.5 EUR 1.0 1
turnover of 3.9trillion trillion 3.9trillion te
currencies in the
global market is
approximately___
__?
 The two
currencies are
Quoting Term Pair Quoting None of Edit | Dele
18 called “base 1
currency Currency Currency currency the above te
currency” (BC)
and ________.

The BC is the
currency that is
Edit | Dele
19 priced and its TRUE FALSE TRUE * . 1
te
amount is fixed at
one unit.

Interbank market
Merchant None of Edit | Dele
20 is the market Bank Dealers Bank 1
Banker the above te
between_____

Who quote price

Merchant None of Edit | Dele
21 for buy & sale in Dealer Bank Dealer 1
Banker the above te
inter bank market?

In interbank
market merchants
Edit | Dele
22 are price takers TRUE FALSE TRUE * . 1
te
and banks are
price givers.

The prices quoted

for buying is
Bid Price , Buyer Buyer Bid Price , Bid Price ,
called______ and Edit | Dele
23 offer or Price , Price , Saller offer or 1
the price quoted te
Ask Price Saller Price Offer Price Price Ask Price
for selling is called
as_______

Suppose a bank
quotes USDINR
spot price as Edit | Dele
24 45.06 45.05 45.0005 45.0006 45.06 1
45.05/ 45.06 to a te
merchant. What is
the ask price?

Spread is an
important
None of Edit | Dele
25 parameter to note Liquidity Volume Liquidity Trading 1
the above te
while assessing
market ?

In USDINR spot
None of Edit | Dele
26 market, the Narrowing Positive Upper Narrowing 1
the above te
spreads are wide
at the time of
 opening and
gradually start
_____as the
market discovers
the price.

The offer price is

Abbreviate Abbreviate None of Edit | Dele
27 generally quoted Narrowing Positive 1
d d the above te
in ______form.

Offer price is
quoted in terms of Edit | Dele
28 TRUE FALSE TRUE * . 1
last two decimal te
places.

Whenever the
base currency
buys more of the Appreciate Depreciate High Appreciate Edit | Dele
29 Weakened 1
quotation d d Volume d te
currency, the base
currency has ?

In India, OTC
market is open Edit | Dele
30 TRUE FALSE TRUE * . 1
from 9:00 AM to te
5:00 PM.

The market is
open for the last
half hour is meant
Edit | Dele
31 only for interbank TRUE FALSE TRUE * . 1
te
dealings for banks
to square off
excess positions.

_____is the price

available to the Market None of Edit | Dele
32 IBR Bid Price IBR 1
bank in the Price the above te
interbank market..

IBR could differ Edit | Dele

33 TRUE FALSE TRUE * . 1
from bank to bank te

Derivative called
underlying, can be Edit | Dele
34 TRUE FALSE TRUE * . 1
interest rate or te
loan.

35 Forward contract FALSE TRUE FALSE * . 1

Edit | Dele
are customized
 contract. te

Forward contract
Edit | Dele
36 are standardized FALSE TRUE FALSE * . 1
te
contract?

LEAPS are
options with Edit | Dele
37 3 1 3 2 5 1
maturity up to te
_____years.

______is an Equity Equity

Equity Edit | Dele
38 example of basket index Call Option Put Option index 1
Option te
option . option option

Swaps contracts
Standardiz None of Edit | Dele
39 are _______ Private Private Exchange 1
ed the above te
contracts.

Interest rate
swaps related
Interest
cash flows Same Different Same None of Edit | Dele
40 rate 1
between the currency currency currency the above te
difference
parties in
the________.

Currency Swaps
involves
Interest
exchanging with Different Different Same None of Edit | Dele
41 rate 1
the cash flows in currency currency currency these te
difference
one direction
being in _____

A payer Swaptions
is an option to Floating, Fixed , Floating, Fixed, Floating , Edit | Dele
42 1
receive _____and fixed floating fixed cash cash te
pay _____

Growth Drivers of
Derivatives are Trenchanc Edit | Dele
43 Volatility Liquidity Price Volatility 1
increased _____in y te
financial markets.

. Growth Drivers of
Derivatives are
Edit | Dele
44 improvement in TRUE FALSE TRUE * . 1
te
communication
facilities and
decrease in
 transaction costs

Derivatives help in
Future Current Close Future Forward Edit | Dele
45 discovery of 1
Prices Price Price Prices Price te
_______

Derivatives have
helped in
increasing the Edit | Dele
46 TRUE FALSE TRUE * . 1
volume in te
underlying cash
market

Derivative help Edit | Dele

47 TRUE FALSE TRUE * . 1
transfer of risk? te

The price of
derivative
converge with the
price of the Edit | Dele
48 TRUE FALSE TRUE * . 1
underlying at the te
expiration of the
derivative
contract.

Derivative due to
their inherent
Edit | Dele
49 nature are linked TRUE FALSE TRUE * . 1
te
to the underlying
cash market.

_____ trades shift

to more control Speculativ Speculativ None of Edit | Dele
50 OTC Forward 1
environment of e e the above te
derivative market.

The key difference

being that
exchange traded
Edit | Dele
51 derivative r TRUE FALSE TRUE * . 1
te
standardized while
OTC contract r
customized.

Currency future
Customize None of Edit | Dele
52 are a ______ Linear Non linear Linear 1
d the above te
product.

53 1000 500 1000 100 10 1

The USD lot size Edit | Dele
 are_____ te

The one tick value Edit | Dele

54 2.5 2.5 1.5 2.25 2.35 1
of USDINR is____ te

Spot price are at

which the Spot Spot Future Cash Currency Edit | Dele
55 1
underlying asset Market Market Market Market Market te
trades in the_____

The last business

day (excluding
Saturdays) of the
month is known as Edit | Dele
56 TRUE FALSE TRUE * . 1
the Value date or te
Final Settlement
date of each
futures contract.

Expiry date are

refers to the last
day on which the
contract will be two two seven two five
Edit | Dele
57 traded (Last working business working working business 1
te
Trading Day), and day day day day day
is _______prior to
the final
settlement date.

In currency trading
Edit | Dele
58 the lot size of 100000 1000 5000 50000 100000 1
te
JPYINR_____ ?

The amount
deposited for the
first time in the
margin account Initial SPAN MTM Cash Initial Edit | Dele
59 1
while entering the Margin Margin Margin Margin Margin te
currency future
contract is termed
as ____

At the end of each

trading day the
margin account is Marking to Initial Marking to None of Edit | Dele
60 SPAN 1
adjusted to show market Margin market the above te
the investors
profit/ loss
depending upon
 the futures closing
prices. This
methodology is
know as _______

T+1 day T+1 day

Marking to market
before the before the Edit | Dele
61 margin charge Trade day T+1 day T+2 day 1
start start te
on_____
trading trading

Banks Banks
Who are which r which r
Edit | Dele
62 authorized dealer licensed by Individuals Bank licensed by Company 1
te
in OTC market? RBI ti deal RBI ti deal
in FX in FX

Retail speculators
with NO exposure Edit | Dele
63 FALSE TRUE FALSE * . 1
to FX can trade in te
OTC market.

Future offer lower

cost of trading as Edit | Dele
64 TRUE TRUE FALSE * . 1
compared to OTC te
market.

________is to
reduce the
volatility in future
Edit | Dele
65 cash flows by Hedgers Trader Speculator Hedgers Arbitrager 1
te
locking in the
future currency
rates

______ does not

have a real
None of Edit | Dele
66 exposure to Speculator Arbitrager Speculator Hedgers 1
the above te
foreign currency
risk.

The financial
settlement
Clearing Clearing
guarantee in Edit | Dele
67 Corporatio SEBI Corporatio RBI Exchange 1
currency te
n n
derivative taken by
_______

_______ clear and Trading Trading Profession Edit | Dele

68 Trading Clearing 1
settle their own cum cum al Clearing te
Member Member
trades as well as Clearing Clearing Member
 trades of other Member (TM) (CM) Member (PCM)
trading members. (TCM) (TCM)

PCM can be a Edit | Dele

69 TRUE FALSE TRUE * . 1
trading member. te

A TM's open
position is arrived
at as the ______of
Summatio Outstandi Edit | Dele
70 his proprietary Net Grossed Summation 1
n ng te
open position and
clients' open
positions

The maximum
allowable open
position limit Clearing Edit | Dele
71 Exchange SEBI RBI Exchange 1
across all Member te
members by
_____

_____________is
Clearing
accountable for Clearing Clearing Edit | Dele
72 Dealer Corporatio Exchange 1
positions of all member member te
n
trading members.

Exchange also
calls for
Edit | Dele
73 information TRUE FALSE TRUE * . 1.
te
directly from the
client itself.

The gross open

position limits of
client in USDINR
Edit | Dele
74 across contracts 6% 6% 10% 8% 15% 1
te
have been
prescribed
_______

The gross open

position limits of
non bank trading
member in Edit | Dele
75 1000 mn 100 mn 200 mn 500 mn 1000 mn 1
JPYINR across te
contracts have
been prescribed
_______
 . The gross open
position limits of
bank trading
member in Edit | Dele
76 50 mn 10 mn 50 mn 20 mn 100 mn 1
GBPINR across te
contracts have
been prescribed
_______

All currency
futures contracts Cash and None of Edit | Dele
77 Cash Delivery Cash 1
are delivery these te
_______settled

The settlement
amount for a CM
Edit | Dele
78 is ______across Netted Grossed Summation open Netted 1
te
all their
TMs/clients

The maximum
loss limit, allows a
member to sustain Edit | Dele
79 75% 50% 65% 75% 90% 1
on a real-time te
basis, is ____ of
the total deposit.

In currency
derivative every 50%,
60%, 75%, 60%, 75%, 50%, 60%, 60%, 80%, Edit | Dele
80 time loss amount 65%, or 1
or 90% or 90% or 75% or 90% te
goes beyond the 85%
levels of _______

when the loss

crosses the 75%
of the total deposit Suspende Block Cancel Edit | Dele
81 Block Suspended 1
limit, the member d Order Orders te
is ______by the
system.

The financial
soundness of the
Edit | Dele
82 members is the TRUE FALSE TRUE * . 1
te
key to risk
management.

Clearing
Upfront initial Clearing Trading Clearing Edit | Dele
83 Exchange Corporatio 1
margin is charged Member member Member te
n
for all the open
 positions of a
_______

In currency
Clearing
derivative trading Clearing Trading Clearing Edit | Dele
84 Exchange Corporatio 1
member limit set Member member Member te
n
by ______

Separate
settlement
Clearing
guarantee funds Trading Clearing Edit | Dele
85 Exchange Exchange Corporatio 1
for this segment member Member te
n
have been created
by ______.

which margin use

by exchange for
Initial None of Edit | Dele
86 compute on-line SPAN SPAN VaR 1
Margin the above te
risk management
system .

initial margin
charge for the
Edit | Dele
87 purpose of TRUE FALSE TRUE * . 1
te
allowable
exposure limits.

Value at Risk
(VaR) based on a
worst case loss of Edit | Dele
88 One day One week One day Three day Five day 1
a portfolio as to te
cover a 99% over
a ___ horizon.

SPAN
methodology is
adopted the risk Individual Trading Clearing Individual None of 1 Edit | Dele
89
involved in the client Member Member client the above 3 te
portfolio of each
________.

An IT professional
buys a house for
He receive USD in future so he should
INR 500,000 for
sell USD future contract and settlement of Sold, Bought, Sold, Sold, Bought, Edit | Dele
90 which payment 1
payment Rs.49 are lower to current USD Lower Higher Lower Higher Lower te
has to be made
Rs.50.
after three
months. As he is
expecting to
 receive USD
10,000 in three
months, he
executes 10
USDINR futures
contracts to hedge
currency risk at a
price of 50. When
he received the
payment, he
converted USD
into INR with his
bank at a price of
51 for making the
payment for the
house and also
settles the
contract at a price
of 49. Given this
situation, would he
have sold/ bought
USDINR futures
and would the
effective price for
house be lower
than or higher
than USD 10,000

A trader in India
expects
international gold
prices to
appreciate from
USD 1500 per
ounce to USD
LOT = 1500/3=500, 500*30=15000,
1800 in next six
15000/1000=15 Lot Real Return : GOLD :
months. To benefit
720000-660000=60000, 15 lots, 15 lots, 15 lots, 18 lots, 18 lots, Edit | Dele
91 from the view, he 1
60000*100/66000 =9 ` FUT USD : 13.6% 13.6% 13% 12% 13.6% te
buys 30 grams of
690000-660000 =30000,
gold at Rupees
30000*100/690000=4.6, (9+4.6=13.6%)
22,000 per gram
and also sold 6
month USDINR
futures at 46. After
six months, gold
prices appreciated
to USD 1800 per
ounce and the
 trader sold gold at
Rupees 24,000
per gram and
unwinds currency
futures contract at
44. Assuming 1
ounce is equal to
3 grams, how
many lots of
currency futures
would he have
used to hedge the
currency risk and
how much was the
real return for the
investor?

A person has
invested USD
100,000 in US
equities with a
view of
appreciation of US
stock market. In
next one year, his
investments in US
equities
appreciated in
value to
USD120,000. The
investor decided USD Return = 120000-100000=20000,
to sell off his =20% and INR Return : (100000*44.5) – Edit | Dele
92 20%, 24% 20%, 16% 20%, 24% 20%, 20% 20%, 18% 1
portfolio and (120000*46) = 1070000 = te
repatriate the 1070000*100/4450000 = 24%
capital and profits
to India. At the
time of investing
abroad the
exchange rate
was 44.5 and at
the time of
converting USD
back into INR, he
received an
exchange rate of
46. How much is
the return on
investment in USD
 and in INR
respectively?

A person has
invested INR
100,000 in an
Indian corporate
bond for a year
giving a return of
16% in one year.
The person plans
to use the
proceeds from the
maturity of
corporate bond to
fund his son's
education on US. Bond Value: 100000+16% = 116000, and
Edit | Dele
93 At the time of USD value : 50+4% = 52, Net USD 2231 2231 2320 2417 2083 1
te
investing in the Require : 116000/52 = 2231
corporate bond,
USDINR spot rate
was 50 and one
year premium was
4%. 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?

A trading member
(TM) has two
clients "A" and "B"
and he also does
T.M. = buy lot 12 – 2 sales lot = 10, A
proprietary trading
client buy lot 12 – 2 sales lot = 10, B
in currency
client buy lot 12 – 2 sales lot 2 = 10, total 30,000; 30,000; 10,000; zero,
futures. On day 1, 10,000; Edit | Dele
94 lot 10+10+10 = 30 lot size = 1000 open 10,000; 10,000; 10,000; 10,000; 1
TM buys 12 lots of zero; zero te
position 10,000 10,000 10,000 10,000
USDINR one
30*1000,10*1000,10*1000=30000,10000,
month futures and
10000
also sells 2 lots of
the same contract
on the same day
in his proprietary
book. On the
 same day, client
"A" buys 12 lots of
USDINR one
month futures and
also sells 2 lots of
the same contract
while client "B"
buys 12 lots and
sells 2 lots. What
would be the open
position (in USD)
of the trading
member, client "A"
and client "B"
respectively at the
end of day 1?

A trading member
(TM) has two
clients "A" and "B"
and he also does
proprietary trading
in currency
futures. On day 1,
TM buys 12 lots of
USDINR one
month futures and
also sells 2 lots of
the same contract
on the same day
T.M. BUY lot 8 – 2 Sales lot = 6, A client
in his proprietary 30,000; 30,000; 10,000; zero,
buy lot 8 – 2sales lot=6, B client buy lot 2 10,000; Edit | Dele
95 book. On the 10,000; 10,000; 10,000; 10,000; 1
– 8 sales lot =6, total settlement lot 6+6+6 zero; zero te
same day, client 10,000 10,000 10,000 10,000
= 18 , 18000,6000,6000
"A" buys 12 lots of
USDINR one
month futures and
also sells 2 lots of
the same contract
while client "B"
buys 12 lots and
sells 2 lots. What
would be the open
position (in USD)
of the trading
member, client "A"
and client "B"
respectively at the
 end of day 1?

A client buys a
USD call option at
strike of 45.5 and
pays a premium of
Call break event = strike price + premium, Edit | Dele
96 INR 0.3. What 45.8 46.1 45.6 45.8 45.2 1
45.5+.03= 45.80 te
would be the
breakeven point
for the
transaction?

A trading member
has two clients in
currency futures
segment and one
client in currency
option segment. At
the end of a
trading day, one of
the clients in
currency futures 2000 short
segment has 5000 for
USD short position client 1 sales 5000 buy 0=5000, client 2 currency
and the other sales 0 buy 4000 client 3 sale 0 buy 11000 11000 futures and 20000 Edit | Dele
97 4000 USD 1
client has 4000 2000= 2000 total unit 5000+3000+3000 = USD USD 2000 long USD te
USD long position. 11000 for
Additionally, the currency
currency option options
client has 2000
USD long position.
What is the gross
open position for
the trading
member for the
purpose of
monitoring open
position?

A trading member 2000 short

has two clients in for
currency futures client 1 sale unt 6000 – buy 3000 = 3000, currency
segment and one client 2 sales 6000 – sales 3000 = 3000 futures and 12000 No open Edit | Dele
98 9000 USD 9000 USD 1
client in currency client 3 sale 0 + buy 3000 Total unit 2000 long USD position te
option segment. 3000+3000+3000 = 9000 for
During the day, currency
each of the clients options
in currency futures
 segment sold
6000 USD and
bought 3000 USD.
At the end of a
trading day, each
of the client in
currency futures
segment have
6000 USD short
position and 3000
USD long position.
Additionally, the
currency option
client has 3000
USD long position.
What is the gross
open position for
the trading
member for the
purpose of
monitoring open
position

Assume that price

of a USD-INR call
option is quoted
as INR 0.25 / 0.27
(bid price / ask Edit | Dele
99 we can buy counteract with ask price 0.27 0.27 0.25 0.23 0.29 1
price). Given this te
quote, at what
price could a
company buy the
call option?

Assume that on
1st December
2010, USD-INR
spot was at 45,
premium for buy put @ 0.55, sale call @ 0.71, call =
January 2011 cmp – sp = it is otm ,call profit = 0.71 Put
10 Profit of Profit of Profit of Loss of Loss of
maturity put option = sp – cmp , 45.5-44.25 = 0.75, Net profit 1 Edit | Dele
0 INR 0.91 INR 0.15 INR 0.91 INR 0.2 INR 0.96
at strike of 45.5 is = 0.75-0.55 = 0.20 Total profit =
INR 0.54/0.55 and 0.71+0.20 = 0.91
premium for
January 2011
maturity call option
at strike of 45 is
INR 0.71/0.72. A
client executes a
trade wherein he
buys put at a
strike of 45.5 and
sells a call at a
strike of 45. On
expiry the RBI
reference rate is
44.75. How much
net profit/loss did
the client make
per USD?