NISM Series I - Currency Derivatives Exam Practice Paper 01
| Q (1): A trader sells 10 lots of EURINR 1 month futures when the price was 82.60/82.80 and squares off 5 lots after a week when the price was 83.75/83.85. Calculate the profit or loss on the squared-up transaction. |
| -7500 |
| -5450 |
| -3750 |
| -6250 |
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| Q (2): A trader does the following currency futures trade - sells EURINR and Buys JPYINR for an equivalent amount. What view has he executed? |
| INR weakening against EUR |
| EUR weakening against JPY |
| EUR strengthening against JPY |
| INR strengthening against EUR |
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| Q (3): An exporter hedges 20000 USD by buying September 2020 USDINR Put option at a strike price of Rs 73.00 when the price was Rs 0.47/0.49. The exporter received USD in his account on 20th September. He decided to cancel the option on 20th September when the price for the same contract was Rs 0.22/0.24. How much loss did the exporter make on canceling the Put option if the latest available RBI USDINR reference rate was Rs 72.50? |
| Loss of Rs 5000 |
| Loss of Rs 5200 |
| Loss of Rs 5400 |
| Loss of Rs 5600 |
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| Q (4): If more than one contract in a series is outstanding at the time of expiry/ squaring off, the contract price of the contract so squared off is determined using ___ method for calculating profit/loss on squaring-up. |
| First-in, First-out (FIFO) |
| Last-in, First-out (LIFO) |
| As per the decision of the Clearing corporation |
| The Loss-making contracts are first squared off |
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| Q (5): If one-year interest rate is 2.5% in the UK and 9% in India. If the current GBPINR spot rate is 78, what would be the one-year future rate of GBPINR? |
| Higher than 78 |
| Lower than 78 |
| 78 |
| None of the above |
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| Q (6): Margins across the various clients of a member are collected on a gross basis - State True or False? |
| True |
| False |
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| Q (7): RBI reference rate is the rate published daily by RBI for spot rate for various currency pairs at around ____. |
| 9:00 |
| 10.30 am |
| 12.30 pm |
| 15:00 |
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| Q (8): The methodology usually used to value European options is ___. |
| Binomial pricing |
| Black and Scholes |
| London - Paris pricing system |
| Llyods Theory of option pricing |
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| Q (9): Which of the following example is that of Market Making? |
| A real estate agent quoting a price to sell a bungalow |
| A jewelry store owner quoting a price to buy old jewelry and also quoting a price to sell new jewelry |
| A wholesale fruit vendor quoting a price to sell fruits at low prices |
| A steel junk dealer quoting a price to buy a very old car |
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| Q (10): ___ is TRUE for Exchange Traded Derivatives. |
| Bilateral trade settlement |
| It is only available in stocks and currencies |
| Centralized trade settlement |
| Decentralized counterparty credit risk management |
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