NISM Series I – Currency Derivatives Exam Practice Paper 05

Q 1.A person has invested USD 100,000 in US equities with a view of appreciation of US stock market. In the next one year, his investments in US equities appreciated in value to USD120,000. The investor decided to sell off his portfolio and repatriate the capital and profits to India. At the time of investing abroad, the exchange rate was 44.5 and at the time of converting USD back into INR, he received an exchange rate of 46. How much is the return on investment in USD and in INR respectively?
 20 % , 19 %
 20 % , 20 %
 20 % , 24 %
 20 % , 26 %


Q2.For all currency contracts viz – USDINR, GBPINR, EURINR, and JPYINR, the final settlement price is the exchange rate published by RBI in its press release captioned ‘RBI Reference Rate ‘ – True or False?


Q3.For the same maturity, the premium on the ‘In The Money’ option will be lower than the premium for the ‘Out of The Money’ option – State True or False?


Q4.From the below-given options, which type of complaints against a trading member can be taken up by the Exchange for redressal?
Claims for notional loss, opportunity loss for the disputed period, or trade
 Claims of sub-broker/authorized persons for private commercial dealings with the trading member
 Non-receipt of funds / securities
Complaints in respect of transactions that are already the subject matter of Arbitration proceedings


Q5.Mr. XYZ feels that the EURINR price will go down and so he sells EURINR 10 contracts at Rs. 70.2575 per unit. If tick size is Re.0025 how much he will gain or lose if there is the upward movement of 10 ticks? (1 lot= EUR 1000)
 Profit of 250
 Loss of 250
 Profit of 300
 Loss of 300


Q6.The settlement date for exchange-traded currency futures is ___ .
 Last business day of the month
 Last calendar day of the month
 Two calendar days after the contract expiry
 Two calendar days before the contract expiry


Q 7.What is the tick size for a currency futures contracts in India?
 0.25 paise
 0.025 paise
 25 paise
 2.5 paise


Q8.When a client defaults in making payments in respect of a daily settlement mark to market margins, the contract is closed out – True or False?


Q9.A trader observes that the 3-month EURINR forward is quoting at 75.50 and the future is quoting at 75.10. He decides to use this mispricing to make some profits. What type of market participant would this trader be?


Q10.A trader wants to SELL GBPINR one month future at 70.60 when the current price is 70.50. When he is entering the limit order, the price is fluctuating between 70.40 to 70.80. At what price is the order likely to get executed?
 Any price between 70.40 to 70.80
 Any price above 70.60
 Any price below 70.60
 At or above 70.60

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