NISM Series I - Currency Derivatives Exam Practice Paper 17
| Q (1): A trader executes a currency futures trade – Buys USDINR and sells GBPINR for an equivalent amount. What view has he executed? |
| GBP depreciating against USD |
| GBP appreciating against USD |
| INR appreciating against USD |
| INR depreciating against USD |
| Q (2): Among the following market participants, who is NOT allowed to trade in currency futures in India? |
| NRIs |
| Public Sector Undertakings |
| Retail Speculators |
| None of the above |
| Q (3): An Indian company has both imports and exports in GBP of equal amounts. However, the export realization comes a week after the payments are made for imports. Which type of currency risk is the company facing? |
| Risk of INR appreciation |
| Risk of INR depreciation |
| Risk of forwarding premia |
| There is no currency risk |
| Q (4): Mr. Satish in India expects international gold prices to appreciate by 10% from USD 1200 per ounce to USD 1320 in the next six months. To take advantage of the view he buys 30 grams of gold at Rs. 25000 per gram and also sold 15 lots of 6-month USDINR futures at60After six months, the trader sold gold at Rs 28000 per gram and unwinds currency futures at Rs 63. Assuming 1 ounce is equal to 3 grams, which of the following best describes the return for Mr. Satish and the hedging strategy that he has used? |
| Positive returns, Long USDINR futures |
| Negative returns, Short USDINR futures |
| Positive returns, Short USDINR futures |
| Negative returns, Long USDINR futures |
| Q (5): Options are different from futures in the sense that Options give the buyer a right to buy or a right to sell. Is the state True or False? |
| True |
| False |
| Q (6): State True or False - Premium of a put option decreases with an increase in the spot price. |
| Always True |
| Never True |
| Sometimes True |
| Q (7): A big exporter in India will be receiving USD 1 million after 2 months. He wishes to hedge the same. Various banks are giving him various 2 months USDINR rates. He wants to have transparent pricing. What kind of contract is the most likely to use? |
| He will long USD in the OTC market |
| He will short USD in the OTC market |
| He will long USD in a recognized currency future exchange |
| He will short USD in a recognized currency future exchange |
| Q (8): Mr. Patel takes a short position in the GBPINR futures contract at a price of 80.00 and he sells 20 lots of the same. On expiry, the settlement price is announced at 80.30. How much profit (+) or loss (-) does he make? |
| Profit of 6000 |
| Loss of 6000 |
| Profit of 600 |
| Loss of 600 |
| Q (9): State True or False - Margins across the various clients of a member are collected on a netted-off basis. |
| True |
| False |
| Q (10): A trading member buys 20 lots of USDINR one month futures on day 1 at 74.50 and also sells 12 lots of the same contract on the same day at 74.80 in his proprietary book. The settlement price for the day was 74.40. What would be the mark-to-market margin (MTM) on the open positions? |
| -1200 |
| -800 |
| 1600 |
| -1000 |