NISM Series I – Currency Derivatives Exam Practice Paper 09

Q1.A registered broker buys 30 lots of USDINR at 58.6 and sells 18 lots the same day at 58.80 in his proprietary account. The settlement price for the day was 58.40. What would be his mark to market margin payable?
 Zero
 -1400
 -2400
 1200

 

Q2.A trader is long in GBPINR Put option of the strike price of 80. The current spot price of GBPINR is 83. What is the moneyness of this option?
 At the Money
 In the Money
 Out of the Money
 None of the Above

 

Q3.An exporter buys a house for INR 500,000 for which payment has to be made after three months. As he is expecting to receive USD 10,000 in three months, he executes 10 USDINR futures contracts to hedge currency risk at a price of 50. When he received the payment, he converted USD into INR with his bank at a price of 51 for making the payment for the house and also settles the contract at a price of 49. Given this situation, would he have sold/ bought USDINR futures, and would the effective price for a house be lower than or higher than USD 10,000?
 Bought, Lower
 Sold, Lower
 Sold, Higher
 Bought, Higher

 

Q4.An Immediate Or Cancel (IOC) order ___.
 gets exercised on the last day
is valid for one hour after it is entered into the trading system
is either executed or canceled as soon as it is entered into the trading system
 gets executed at the best price during the day

 

Q5.One-year interest rate is 4% in the US and 1% in the UK. If the current GBPUSD spot rate is 1.65, which of the following could be closest to the one-year future rate of GBPUSD?
 1.7325
 1.65
 1.6995
 1.6005

 

Q6.The currency futures price of USD is at a premium to INR. If the USDINR spot is 75 and a trader thinks that on expiry of one month USDINR futures, the spot may remain at 75. Assuming everything else remaining the same, what currency futures trade strategy would be profitable to him if his views come correct?
 Buy USDINR
 Sell USDINR
 Buy USDINR for 1 month and sell for 3 month
 Sell USDINR for 1 month and buy for 3 month

 

Q7.The mark-to-market gains and losses are settled in cash before the start of trading on ___ day
 T+1
 T+2
 T
On Real-Time basis

 

Q8.A trader is very bearish on EURINR and feels it will reach 70 from the current levels of 75. He wants to maximize his profits from this view. Which of the below options strategies should he consider?
 Buy Call options
 Sell Call options
 Buy Put options
 Sell Put options

 

Q9.An active trader in the currency options market wants to execute his view on change in volatility over a period of time and wants to be insulated from changes in other factors impacting option pricing. What option strategy is he likely to use?
 Covered call
 Calendar spread
 Long option
 Short option

 

Q10.How can the trading member recover the mark-to-market margin of a client if the client defaults on paying mark-to-market margin?
 It can be recovered from the margin money of the equity segment
 It can be recovered from the initial margin
 Give the client a credit line for 7 days to recover the margin
The client can do a new trade that will be profitable and the margin can be recovered from that

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