NISM Series I - Currency Derivatives Exam Practice Paper 13
| Q1.A big potato farmer gets into a contract with a leading fast food restaurant to supply 10 tonnes of potato every month for a certain price. What type of contract is this? |
| Future |
| Forward |
| Options |
| Swap |
| Q2.As a trader, you believe EURUSD will move from 1.65 to 1.60 in the next month. You are a trader based in India where there is no trading in EURUSD. Therefore which of the following would you do to execute this view using currency futures contracts of EURINR andUSDINR. |
| Short EURINR |
| Long EURINR |
| Long EURINR and Short USDINR |
| Short EURINR and Long USDINR |
| Q3.Broker Mr. A charges a brokerage of Rs 20 per lot of USDINR futures on only one leg of the transaction if it's squared off the same day. Broker Mr. B charges Rs 15 per a lot of USDINR futures on both the legs even if it's squared up on the same day. A client buys 15lotsof USDINR futures and sells 10 lots the same day and the balance 5 lots after 4 days. What will be the brokerage charged by brokers Mr. A and Mr. B respectively? |
| 400 and 450 |
| 350 and 375 |
| 525 and 470 |
| 390 and 410 |
| Q4.Due to some overnight global factors, the INR was supposed to weaken during the day. However, INR strengthened during the days of trading. On which of the below factor would contribute to the INR appreciation? |
| Weak Indian Stock Markets |
| Central Banks intervention |
| Huge political unrest in India |
| Banking holidays for the next two days |
| Q5.If a person who is employed with a broking company gives trading advice on USDINR on TV, what best describes the steps that broking house needs to take to ensure that its employee complies with guidelines? |
| The person has to share technical analysis to support the currency view |
| The person has to be presentable and on time in the TV studios |
| The person has to also disclose the proprietary interest of broking house in USDINR currency futures contracts |
| The person has to disclose his educational qualifications |
| Q6.One of the reasons for the growth of financial derivatives is ____ . |
| Limited returns in foreign exchange trade |
| Low awareness of clients about financial derivatives |
| Reducing return in commodity derivatives |
| Reduced cost of communication and development of sophisticated risk management products |
| Q7.The lot size for GBPINR futures contract is ____. |
| 1000 INR |
| 1000 GBP |
| 10000 INR |
| 100 GBP |
| Q8.What describes the currency future in relation to another currency with comparatively higher interest rates? |
| At a premium |
| At a discount |
| At par |
| Q9.A metal company has imported iron and steel from the USA and has to make payments after three months. To hedge the risk the company buys a USDINR call option at a strike price of Rs 49 and pays a premium of Rs 1.50. When the option matures, the settlement price wasRs52.40. How much profit did the company make per USD on this option strategy in Rs. ? |
| 5.3 |
| 3.4 |
| 1.9 |
| -3.4 |
| Q10.A person executes following currency futures trade: sells one lot of USD/INR, buys one lot of JPY/INR. What is the view that he has executed? |
| INR strengthening against USD |
| INR weakening against JPY |
| JPY weakening against USD |
| JPY strengthening against USD |