NISM Series I - Currency Derivatives Exam Practice Paper 13

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Q1.A big potato farmer gets into a contract with a leading fast food restaurant to supply 10 tonnes of potato every month for a certain price. What type of contract is this?
Q2.As a trader, you believe EURUSD will move from 1.65 to 1.60 in the next month. You are a trader based in India where there is no trading in EURUSD. Therefore which of the following would you do to execute this view using currency futures contracts of EURINR andUSDINR.
 Long EURINR and Short USDINR
 Short EURINR and Long USDINR
Q3.Broker Mr. A charges a brokerage of Rs 20 per lot of USDINR futures on only one leg of the transaction if it's squared off the same day. Broker Mr. B charges Rs 15 per a lot of USDINR futures on both the legs even if it's squared up on the same day. A client buys 15lotsof USDINR futures and sells 10 lots the same day and the balance 5 lots after 4 days. What will be the brokerage charged by brokers Mr. A and Mr. B respectively?
 400 and 450
 350 and 375
 525 and 470
 390 and 410
Q4.Due to some overnight global factors, the INR was supposed to weaken during the day. However, INR strengthened during the days of trading. On which of the below factor would contribute to the INR appreciation?
 Weak Indian Stock Markets
 Central Banks intervention
 Huge political unrest in India
 Banking holidays for the next two days
Q5.If a person who is employed with a broking company gives trading advice on USDINR on TV, what best describes the steps that broking house needs to take to ensure that its employee complies with guidelines?
The person has to share technical analysis to support the currency view
The person has to be presentable and on time in the TV studios
 The person has to also disclose the proprietary interest of broking house in USDINR currency futures contracts
 The person has to disclose his educational qualifications
Q6.One of the reasons for the growth of financial derivatives is ____ .
 Limited returns in foreign exchange trade
 Low awareness of clients about financial derivatives
 Reducing return in commodity derivatives
 Reduced cost of communication and development of sophisticated risk management products
Q7.The lot size for GBPINR futures contract is ____.
 1000 INR
 1000 GBP
 10000 INR
 100 GBP
Q8.What describes the currency future in relation to another currency with comparatively higher interest rates?
 At a premium
 At a discount
 At par
Q9.A metal company has imported iron and steel from the USA and has to make payments after three months. To hedge the risk the company buys a USDINR call option at a strike price of Rs 49 and pays a premium of Rs 1.50. When the option matures, the settlement price wasRs52.40. How much profit did the company make per USD on this option strategy in Rs. ?
Q10.A person executes following currency futures trade: sells one lot of USD/INR, buys one lot of JPY/INR. What is the view that he has executed?
 INR strengthening against USD
 INR weakening against JPY
 JPY weakening against USD
 JPY strengthening against USD

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