NISM Series I – Currency Derivatives Exam Practice Paper 02

 Q1.Currency futures position at one maturity which is hedged by an offsetting position at a different maturity is called as _____.
 Basket Trading
 Delta Trading
 Calendar Spread
 Arbitrage Spread

 

Q2.In the OTC spot market, the default mode of settlement is always ___.

 

Q 3.‘Maximum open interest in the previous day’ is used for the purpose of monitoring of open position during the day – State True or False?
  False
  True

 

Q 4.What course of action can be followed by an investor if he/she is not satisfied with the decision of the Arbitration Tribunal?
Nothing as the Tribunal’s decision is final.
 He / She can approach SEBI for suitable action
 He / She can approach any Court of Law
He / She can appeal to the investor grievance cell of the relevant exchange

 

Q 5.What is the correlation between the price of a CALL option to the changes in spot price?
Increase in price with an increasing spot price
 Increase in price with decreasing spot price
Decreasing price with the increasing spot price
 No Co-relation

 

Q 6. What is true with respect to Governing Council of currency futures segment of an exchange?
Governing council of currency futures and equity derivative /cash segment can have a maximum of 25%, common members
Governing council of currency futures and equity derivative /cash segment can have a maximum of 40%, common members
Governing council of currency futures and equity derivative /cash segment can have a maximum of 50%, common members
Governing council of currency futures and equity derivative /cash segment can have a maximum of 10%, common members

 

Q 7. A ‘DERIVATIVE PRODUCT’ can be best described as a ___.
a complex product that is traded only amongst banks and large institutions
a product whose value is derived from the value of one or more underlying variables
a product that can be from Equity / Currency or Commodity markets and are traded on a recognized stock exchange.

 

Q8.A reputed exam company has export revenue in USD and it uses part of it to make import payments in EUR and the balance is converted in INR. The company is concerned about USDINR risk. Which of the folowingl best describes the company’s risk and currency futures strategythatit may use to counter the risk?
 USD depreciating against INR, long USDINR
 USD appreciating against INR, short USDINR
 USD depreciating against INR, short USDINR
 USD appreciating against INR, long USDINR

 

Q9.A trader sells 20 lots of USDINR 1 month futures when the price was 65.60 / 65.90 and squares off 10 lots after a week when the price was 64.65/64.85. How much money (in Rupees) did he make/ lose on the part of the transaction that was squared off?
 6800
 -6800
 7500
 -7500

 

Q10.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 his mark to market margin (MTM) on the open positions?
 3000
 6000
 -3000
 -6000