NISM Series I – Currency Derivatives Exam Practice Paper 18

Q1.For the currency pair JPYUSD, which of the option is true?
 JPY is the Quoted Currency and USD is the Base Currency
 USD is the Quoted Currency and JPY is the Base Currency
 Both JPY and USD are Base Currencies and INR is the Quoted Currency
 Both JPY and USD are Quoted Currencies and INR is the Base Currency

 

Q2.Which of these statements best describes the guidelines for permission for trading in ‘Pro-Account’ by a trading member?
Orders of ‘Pro-Account’ can be entered from a specific location that has been approved by Exchange
Orders of ‘Pro-Account’ can be entered from any five locations which have been approved by SEBI
Orders of ‘Pro-Account’ can be entered from any two locations which have been approved by SEBI
Orders of ‘Pro-Account’ can be entered from a specific location that has been approved by SEBI

 

Q 3.A trader sells 10 lots of USDINR 1 month futures when the price was 74.50/74.70 and squares off 5 lots after a week when the price was 73.55/73.75. How much money (in Rs) did he make/lose on the part of the transaction which was squared off?
 Profit of Rs 3750
 Profit of Rs 2750
 Profit of Rs 4300
 Loss of Rs 2800

 

Q4.Proprietary positions are calculated on a net basis (buy-sell) for each contract – State True or False?
  True
  False

 

Q5.With the introduction of derivatives, the underlying market witnesses __ trading volumes
 higher
 lower
 No impact on trading volumes

 

Q 6. A trading member sells 13 lots of USDINR one month future on day 1 and buys 16 lots of the same contract the same day. What would be his open position at the end of the day in USD?
 26000
 3000
 13000
 16000
 1

 

Q 7.An big importer-exporter has export revenue in EUR and it uses part of it to make import payments in USD. The company is concerned about USDEUR risk for its import payments. What should the company do by using a currency futures strategy to mitigate the risk?
EUR depreciating against USD; Short EURINR and long USDINR for same maturity
EUR appreciating against USD; Short EURINR and long USDINR for same maturity
EUR depreciating against USD; Short USDINR and long EURINR for same maturity
EUR appreciating against USD; Short USDINR and long EURINR for same maturity

 

Q8.What is the lot size of a USDINR currency option?
 1000 INR
 1000 USD
 10000 INR
 10000 USD

 

Q 9. An Indian investor has invested Rs 390000 in US securities. At the time of investment, the exchange rate was 65. Two years later he noticed that his investments have gained 25% in USD terms and liquidated his investments. He repatriated the money to India at thethenexisting rate of Rs 62. What would be his real returns( returns in INR terms)?
 18.56%
 19.23%
 20.87%
 21.30%

 

Q10.Does arbitrage Trading mean risk off-setting positions in contracts expiring on different maturities in the same underlying taken simultaneously – State True or False?
  False
  True

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