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 |