NISM Series I – Currency Derivatives Exam Practice Paper 11

Q1.Assume that on 1st December 2010, USD-INR spot was at 45, the premium for January 2011 maturity put option at the strike of 45.5 is INR 0.54/0.55, and premium for January 2011 maturity call option at the strike of 45 is INR 0.71/0.72. A client Mr. Shah executes a trade whereinhebuys put at a strike of 45.5 and sells a call at a strike of 45. On expiry, the RBI reference rate is 44.75. How much net profit/loss did Mr. Shah make per USD?
 Profit of INR 0.91
 Loss of INR 0.2
 Loss of INR 0.96
 Profit of INR 0.15

 

Q2.At 10.30 am, USDINR was quoting at 49.10/49.30. At 3 pm it was quoting at 49.50/49.70. What would best describe currency move during the day?
 INR has appreciated
 USD has appreciated
 INR has appreciated against USD by 40 paise
 USD has appreciated against INR by 40 paise

 

Q3.At the start of the week, EURUSD is 1.56 and GBPUSD is 1.72. At the end of the week, EURUSD is 1.62 and GBPUSD is 1.70. Which of the following best describes the price movement?
 GBP appreciated against EUR
 EUR appreciated against USD
 EUR depreciated against GBP
 None of the above

 

Q4.Mr. Khan buys the May USDINR contract which cost him Rs 49000. The RBI reference rate for final settlement is fixed at 48.70. How much profit/loss did he make?
 Rs 300 Profit
 Rs 300 Loss
 Rs 30 Profit
 Rs 30 Loss

 

Q5.The contract size for the USDINR futures contract is ____.
 USD 100
 INR 100
 USD 1000
 INR 1000

 

Q6.The price for MARKET ORDERS is decided by ____.
 the client
the broker/clearing member
 the Exchange System / the Trading System
the price is mentioned when the order is entered into the system

 

Q7.Which term best describes SWISS FRANCS?
 Pegged to USD
 Pegged to Gold
 Pegged to EURO
 Free Floating

 

Q 8.___ measures the change in the value of the option with respect to the passage of time.
 Vega
 Theta
 Rho
 Delta

 

Q9.A client sells a GBP call option at strike of 64.70 and receives a premium of INR 0.50. What would be the breakeven point for the transaction?
 64.2
 64.7
 65.2
 65.7

 

Q10.Any party who is dissatisfied with the Arbitration Award of the arbitration tribunal (Appellate Bench) may challenge the same in ____.
 the Stock Exchange
 SEBI
 a court of Law
 Special Appellate Bench

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