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NISM Series - I Currency Derivatives Cert. Mock Test- 2

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NISM Series – I Currency Derivatives Cert. Mock Test- 2

1 / 50

The local currency of a country which has a managed float has depreciated in the past few weeks. Which of the below options could be a suitable measure to reduce this depreciation of currency. (Assume everything else remaining the same)

2 / 50

Of the below mentioned options, which one describes a ‘derivative product’ ?

3 / 50

When two way market quotes are mentioned, BID price would mean ________ .

4 / 50

Who acts as the central counter party to USDINR future trades in India ?

5 / 50

What is the process called in which the actual payin – payout of Profit / Loss or Mark to Market margin happens.

6 / 50

M/s Auto Exports has taken a currency loan and has to make the loan repayments in USD by equal monthly installments. It also has exports remittances (in USD) every month which are slightly above the monthly loan repayment amount. How should the company hedge so that there is no risk involved of currency fluctuations ?

7 / 50

USDINR three month future is quoting at 60.2 and six month is quoting at 61.10. Mr. Naik expects that after a month the three month future should quote at 59.90 and the six month should quote at 60.50. If Mr Naik executes a spread trade and the view goes right, how much profit will he make ?

8 / 50

If one year interest rate is 2.5% in UK and 9% in India. If current GBPINR spot rate is 78, what would be the one year future rate of GBPINR ?

9 / 50

An order to buy a specified quantity of a security at or below a specified price, or an order to sell it at or above a specified price is called as _______.

10 / 50

The value of one tick on each USDINR contract is Rupees _______.

11 / 50

What is the maximum maturity of EURINR future contracts which are traded on a recognised stock exchange ?

12 / 50

A Bank trading member of a currency exchange has the authority to define its own norms for open position limits for its clients – State True or False ?

13 / 50

On the ________ , the USDINR future price is likely to be equal to USDINR spot price.

14 / 50

A GDP growth rate higher than expected may mean relative __________ of the currency of that country, assuming everything else remaining the same.

15 / 50

From the below given options, which type of complaints against a trading member can be taken up by the Exchange for redressal ?

16 / 50

From the below mentioned options, which one is true with respect governing council of Currency future segment and Equity Derivative segment of an exchange ?

17 / 50

Arbitrage Trading means risk off-setting positions in contracts expiring on different maturities in the same underlying taken simultaneously – State True or False ?

18 / 50

Is it accurate to state that the Special Committee established by SEBI on Currency Futures provides recommendations on product design, risk management, and membership norms for currency futures?

19 / 50

A Trading Member can seek exchange’s permission if he wants to enter ‘Pro Account’ order from multiple locations – State True or False ?

20 / 50

Mr Doshi believes that there is a very strong bullish trend in EURINR. He also believes that there will be a increase in volatility. So which option strategy is he most likely to use ?

21 / 50

True or False: Selling a call option implies an obligation to buy an underlying asset.

22 / 50

In the OTC spot market, the default mode of settlement is always ____________.

23 / 50

A trading member buys 80 lots of USDINR at 74.50 and sells 90 lots the same day at 74.60. The settlement price for the day was 74.30. What would be their mark-to-market margin (MTM) on the open positions?

24 / 50

Which statement best describes the guidelines for brokers advertising their business in public media?

25 / 50

If volatility is anticipated to rise, is it generally expected that there will be an increase in option premium?

26 / 50

If the GDP growth of a large developed country is higher than expected (assuming everything else remains the same), what type of impact would it likely have on the country’s currency?

27 / 50

Mr. Kohli invested Rs 1,00,000 in the US stock markets when the USDINR rate was 60. After one year, his investment appreciated by 18% in USD terms. He sold his investments and repatriated the money to India at the then-existing rate of 62. What are his real returns in INR?

28 / 50

A person needs to buy one unit of USD and simultaneously sell one unit of USD in the OTC spot market, but from different banks. Both banks quoted the same price as 75.31/75.35. In this transaction, how much currency conversion profit or loss has the person made, compared to a situation where they had export and import transactions in the same bank, and the import payment could be made from export receivables?

29 / 50

Srinivas, an employee of a broking house, has a strong track record in predicting currency trends. Based on his analysis, he believes that the INR will appreciate against the USD in the next six months. He advised some clients to take a short position by selling USD against INR and guaranteed against losses. However, his supervisor took action against him for violating trading guidelines. What should Srinivas have done to avoid the punishment?

30 / 50

The minimum net worth requirement for a company to be eligible to apply for authorization as an exchange for currency futures is Rs _______.

31 / 50

A trader enters a long position in a USDINR futures contract at a price of 65, buying 40 lots. Upon the contract’s expiry, the settlement price is 65.40. What is the resulting profit or loss?

32 / 50

Mr. Amit sells a USD put option with a strike of 66 and receives a premium of INR 0.4. What is the break-even point for these two transactions?

33 / 50

The current EURINR spot is 80. The current future price of EUR is at a premium to INR. A trader believes that on expiry of one month EURINR futures, the spot may remain at 80. What currency futures trade strategy would be profitable to the trader if his views come correct?

34 / 50

What is the process of actual pay-in/pay-out of mark-to-market margin or profit/loss on cancellation or on maturity of futures contract called?

35 / 50

The ______ has issued guidance notes on the accounting of index futures contracts from the viewpoint of parties who enter into such futures contracts as buyers or sellers.

36 / 50

Total open interest, used for monitoring open positions during the day, is best described as _______.

37 / 50

An Indian investor invested Rs 390,000 in US securities when the exchange rate was 65. Two years later, he observed a 25% gain in USD terms and liquidated his investments. Upon repatriating the money to India at the prevailing rate of Rs 62, what would be his real returns (returns in INR terms)?

38 / 50

A vegetable oil factory owner has entered into a fixed-price contract with McDonald’s for the sale of a certain quantity of vegetable oil for a year. This type of contract is known as a _______.

39 / 50

Mr. Amit, an employee of a currency broking house, is well-versed in currency movements. He holds the view that INR should appreciate against EUR in the next 6 months. Consequently, he advised some of his clients to take a short position by selling EUR against INR and provided a guarantee against any losses. However, the manager takes action against Mr. Amit for violating certain trading guidelines. To avoid punishment, Mr. Amit should have _______.

40 / 50

Mr. Vaibhav believes that USDINR will appreciate, and accordingly, he enters into a derivative contract to execute his view. His view proves correct, but he observes that his profits are not increasing along with the USDINR appreciation. He would have entered into a ________ derivative contract.

41 / 50

What is true regarding the Governing Council of the currency futures segment of an exchange?

42 / 50

A ‘DERIVATIVE PRODUCT’ can be best described as a ______ .

43 / 50

If a person has a bearish view on USDINR, which would be the appropriate strategy for the objective of maximizing the profit?

44 / 50

Identify the appropriate strategy for a BULLISH view on USDINR and trade objective of zero cash outgo.

45 / 50

As a trader, you believe USDJPY will move from 90 to 95 in the next one month. As you are based in India where there is no trading in USDJPY, you would execute this view using currency future contracts of JPYINR and USDINR.

46 / 50

If more than one contract in a series are outstanding at the time of expiry/squaring off, the contract price of the contract so squared off should be determined using the _______  method for calculating profit/loss on squaring-up.

47 / 50

Which of the following statements is TRUE regarding Exchange Traded derivatives?

48 / 50

When you purchase an option, does it imply that you have the right to sell the underlying asset?

49 / 50

The minimum net worth required for a company to apply to become an authorized exchange of currency futures is Rs ______ crores.

50 / 50

A sub-broker has to execute a bipartite agreement between him and his client clearly specifying rights and obligations of each party – State True or False ?

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