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.
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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
 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?
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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 ____.
 10.30 am
 12.30 pm
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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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