Que 1.

Settlement Price Daily mark to market settlement price will be the closing price of the futures contracts for the trading day and the final settlement price shall be the RBI reference rate for last trading date of the contract. True False Both Correct None of the above Que 2. The closing price for a futures contract is currently calculated as the last half an hour weighted average price of the contract. True False Both None of the above

Que 3. At ________ the gross open position of the client across all contracts should not exceed 6% of the total open interest or USD 10 million whichever is higher. Trading member Level Client level Clearing Member level Delear Que 4. Clearing Member Level i.e. No separate position limit is prescribed at the level of clearing member. However,the clearing member shall ensure that his own trading position and the positions of each trading member clearing through him are within the limits True False Both None

Que 5. If you are Bearish on USD you will Buy USD Sell USD Both None Que 6. If a trader in the currency futures market expects INR will depreciate against USD then he will sell USD/INR True False Both None

Que 7. In an Optimal Hedge, the total value of the futures contracts involved is the same as the value of the spot market position. False True Both None Que 8. The Final Settlement price of a Currency Futures contract is the ____________. MIBOR rate on the last trading day of the futures cont ract LIBOR reference rate on the last trading day of the futures contract RBI reference rate on the last trading day of the futures contract None of the above

Que 9. Who receives end of day reports from all branches & dealers under same trading member

corporate manager branch manager delear Trader Que ________ loss is calculated by marking each transaction in security to the 10. closing price of the security at the end of trading Mark to Market M2M Daily Net Total

Que _______ currencies are usually needed for payments across national 11. borders INR Foreign Doller Euro Que The Euro has a strong international presence and over the years has 12. emerged as a premier currency, second only to the _______. Japanese Yen USD GBP CHF

Que A Forwad contract is a standardized contract 13. True False

Both None Que The calendar spread margin is at a value of _______ for all months of 14. spread 50 100 150 200

Que For a calendar spread position, the extreme loss margin is charged on one15. third of the mark-to-market value of the far-month contract True False Both None of the above Que Extreme loss margin is computed at 1% on the mark-to-market value of 16. the Gross Open Position. True False Both None of the above

Que A derivatives contract cannot exist without an ________ 17. Exchange Underlying be it equity, interest rate etc. increase in volatility increase in arbitrage

Que Hedging is used for removal of Unwanted ________ 18. VAR Exposure or Risk Profits Shares

Que Disclosed Quantity is a ___________ condition 19. Quality or Volume Condition Time Condition Price Condition None of the above Que An ______ Hedge is a hedging strategy which yields the highest level of 20. utility to the hedger. Basic Partial Optimal All of the above

Que An intra-currency pair spread consists of one long futures and one short 21. futures contract. Both have the same underlying but different maturities True False Both None Que _________ means locking in a profit by simultaneously entering into

22. transactions in two or more markets` Hedging Trading Arbitrage Speculation

Que _______ Day is Last working day of the month (subject to holiday 23. calendars) Expiry Trading Buying Selling Que If you are Bearish on INR you will 24. Buy USD Sell USD Both of the above None of the above

http://www.kip-world.com/examination.php?eid=39 Que1 Settlement Price Daily mark to market settlement price will be the closing price of the futures contracts for the trading day and the final settlement price shall be the RBI reference rate for last trading date of the contract. Ans1 True

Que2 The closing price for a futures contract is currently calculated as the last half an hour weighted average price of the contract. Ans2 True

Que3 At ________ the gross open position of the client across all contracts should not exceed 6% of the total open interest or USD 10 million whichever is higher. Ans3 Clearing Member level Que4 Clearing Member Level i.e. No separate position limit is prescribed at the level of clearing member. However,the clearing member shall ensure that his own trading position and the positions of each trading member clearing through him are within the limits Ans4 False Que5 If you are Bearish on USD you will Ans5 Sell USD Que6 If a trader in the currency futures market expects INR will depreciate against USD then he will sell USD/INR Ans6 False Que7 In an Optimal Hedge, the total value of the futures contracts involved is the same as the value of the spot market position. Ans7 False Que8 The Final Settlement price of a Currency Futures contract is the ____________. Ans8 RBI reference rate on the last trading day of the futures contract Que9 Who receives end of day reports from all branches & dealers under same trading member Ans9 branch manager Que10 ________ loss is calculated by marking each transaction in security to the closing price of the security at the end of trading Ans10 Mark to Market M2M Que11 _______ currencies are usually needed for payments across national borders Ans11 Foreign Que12 The Euro has a strong international presence and over the years has emerged as a premier currency, second only to the _______. Ans12 USD

Que13 A Forwad contract is a standardized contract Ans13 True Que14 The calendar spread margin is at a value of _______ for all months of spread Ans14 50 Que15 For a calendar spread position, the extreme loss margin is charged on one-third of the mark-to-market value of the far-month contract Ans15 True Que16 Extreme loss margin is computed at 1% on the mark-to-market value of the Gross Open Position. Ans16 True Que17 A derivatives contract cannot exist without an ________ Ans17 Underlying be it equity, interest rate etc. Que18 Hedging is used for removal of Unwanted ________ Ans18 Exposure or Risk

Que19 Disclosed Quantity is a ___________ condition Ans19 Quality or Volume Condition Que20 An ______ Hedge is a hedging strategy which yields the highest level of utility to the hedger. Ans20 Optimal Que21 An intra-currency pair spread consists of one long futures and one short futures contract. Both have the same underlying but different maturities Ans21 True Que22 _________ means locking in a profit by simultaneously entering into transactions in two or more markets` Ans22 Speculation Que23 _______ Day is Last working day of the month (subject to holiday calendars) Ans23 Expiry

Que24 If you are Bearish on INR you will Ans24 Buy USD

Guide for next 24 Questions. Answer maths questions. Que 1. Exchange rates are quoted in per unit of the ______ currency. Term Base Basis Fix Que 2. T h e d i r e c t i o n s i s s u e d u n d e r s e c t i o n _ _ _ _ _ _ _ o f t h e R e s e r v e B a n k o f I n d i a A c t , 1 9 3 4 a r e t i t l e d C u r r e n c y F u t u r e s ( R e s e r v e B a n k ) D i r e c t i o n s , 2 0 0 8 c a m e i n t o f o r c e w . e . f . 6 t h A u g u s t , 2 0 0 8 . 45X 45W 45V 45Z

Que 3. Among which of the following is the best sell order 42.0025/42.2500 42.0125/42.0150

42.0000/42.0100 42.0010/42.0125 Que 4. The orders are stored in the Trading System as per the _______ priority. Time/ Price Time Price Price/ Time

Que 5. A tick is the _____________ at which traders are able to enter bids and offers. maximum trading increment price minimum trading increment None of the above Que 6. Short Hedger will Long currency futures Short Currency Futures Both of the Above None of the above

Que 7. [ ( p ( p

T o t a l r i c e ) [ T o t a T o t a l r i c e ) ] MTM loss/profit Actual loss/profit Gross Profit

B u y T o l S a l S a l e =

Q t y X t a l B u e V a l u Q t y X

C l o s e y V a l u e ] e C l o s e

Gross Loss Que 8. MTM is calculated at the end of the day on all open positions by comparing transaction price with the closing price of the share for the _______ Previous Day Day Next Day Last Thursday

Que 9. SPAN Risk is a _______ risk Portfolio Position Both of the Above None of the above Que Among which of the following is the best Buy order 10. 42.0025/42.2500 42.0125/42.0150 42.0000/42.0100 42.0010/42.0125

Que Non-Bank Trading Member Level i.e. The gross open positions of the 11. trading member across all contracts should not exceed 15% of the total open interest or USD 50 million whichever is higher. However, the gross open position of a Trading Member, which is a True False Both of the Above

None of the above Que In order to achieve VAR, the price scan range is fixed at 3.5 Standard 12. Diviation True False Both of the Above None of the above

Que The Forward Rate is derived by adjusting the Spot rate for the interest 13. rate differential of the two currencies for the period between the Future and the Forward date. True False Both of the Above None of the above Que The last business day of the month will be termed the Value date / Final 14. Settlement date of each contract. True False Both of the Above None of the above

Que Price at which an order gets triggered from the stop loss book. 15. Regular Order Stop Loss Order Odd Lot Normal Order

Que A best buy order is the order with the ______ price. 16. Lowest Highest Middle Any Order

Que 17.

_ m c n n

_ o u a a

_ _ _ _ _ _ _ _ _ r e f n e y d e n o m i n a t r r e n c y o f a n o t t i o n o r a g r o u t i o n s

e r s t o e d i n t h e h e r p o f

INR Foreign Exchange Dollar Euro Que Minimum age for admission as a Trading Member of Currency Futures. 18. Derivatives Segment is 21Years 18 Years 25 Years 15 years

Que A futures contract is a Customized contract 19. True False Both of the Above None of the above

Que The mark to market margin (MTM) is collected from the member before 20. the start of the trading of the _____ day Next Last T+2 T+3

Que Almost every nation has its own national currency or monetary unit - used 21. for making and receiving payments within its own borders False True Both of the Above None of the above Que If a trader in the currency futures market expects INR will appreciate 22. against USD then he will buy USD/INR True False Both of the Above None of the above

Que An optimal hedge is one where the changes in the spot prices are negatively 23. correlated with the changes in the futures prices and perfectly offset each other. True False Both of the Above None of the above

Que The dealer can view previous trades for _______ id only. 24. Trading Member Branch Manager Own user Corporate Manager

Answers Que1 Ans1 Que2 Exchange rates are quoted in per unit of the ______ currency. Term T h e d i r e c t i o n s i s s u e d u n d e r s e c t i o n _ _ _ _ _ _ _ o f t h e R e s e r v e B a n k o f I n d i a A c t , 1 9 3 4 a r e t i t l e d C u r r e n c y F u t u r e s ( R e s e r v e B a n k ) D i r e c t i o n s , 2 0 0 8 c a m e i n t o f o r c e w . e . f . 6 t h A u g u s t , 2 0 0 8 . 45W Among which of the following is the best sell order 42.0125/42.0150 The orders are stored in the Trading System as per the _______ priority. Price/ Time A tick is the _____________ at which traders are able to enter bids and offers. minimum trading increment Short Hedger will Short Currency Futures

Ans2 Que3 Ans3 Que4 Ans4 Que5 Ans5 Que6 Ans6

Que7

[ ( p V V X

T r a a

o t a l B u y Q t y X C l o s e i c e ) T o t a l B u y l u e ] [ T o t a l S a l e l u e ( T o t a l S a l e Q t y C l o s e p r i c e ) ] =

Ans7 Que8

Actual loss/profit MTM is calculated at the end of the day on all open positions by comparing transaction price with the closing price of the share for the _______ Day SPAN Risk is a _______ risk Portfolio Among which of the following is the best Buy order 42.0000/42.0100 Non-Bank Trading Member Level i.e. The gross open positions of the trading member across all contracts should not exceed 15% of the total open interest or USD 50 million whichever is higher. However, the gross open position of a Trading Member, which is a True In order to achieve VAR, the price scan range is fixed at 3.5 Standard Diviation True The Forward Rate is derived by adjusting the Spot rate for the interest rate differential of the two currencies for the period between the Future and the Forward date. True The last business day of the month will be termed the Value date / Final Settlement date of each contract. True Price at which an order gets triggered from the stop loss book.

Ans8 Que9 Ans9 Que10 Ans10 Que11

Ans11 Que12 Ans12 Que13

Ans13 Que14 Ans14 Que15

Ans15 Que16 Ans16 Que17

Stop Loss Order A best buy order is the order with the ______ price. Highest _ _ _ _ _ _ _ _ _ _ _ r e m o n e y d e n o m i n a t t h e c u r r e n c y o f n a t i o n o r a g r o u n a t i o n s Foreign Exchange Minimum age for admission as a Trading Member of Currency Futures. Derivatives Segment is 21Years A futures contract is a Customized contract False The mark to market margin (MTM) is collected from the member before the start of the trading of the _____ day Next Almost every nation has its own national currency or monetary unit used for making and receiving payments within its own borders True If a trader in the currency futures market expects INR will appreciate against USD then he will buy USD/INR False An optimal hedge is one where the changes in the spot prices are negatively correlated with the changes in the futures prices and perfectly offset each other. True The dealer can view previous trades for _______ id only. f e r s t o e d i n a n o t h e r p o f

Ans17 Que18 Ans18 Que19 Ans19 Que20 Ans20 Que21 Ans21 Que22 Ans22 Que23

Ans23 Que24

Ans24

Own user

Que 1. In foreign exchange markets,in a currency pair, the second currency is called as the ____ currency. Term Base Cross Fix Que 2. The __________ is the third most traded currency in the world. YEN US DOLLAR GBP EURO

Que 3. The initial margin so computed would be subject to a minimum of 1.75% on the first day of currency futures trading and 1% thereafter. True False Both of the Above None of the above Que 4. T h e c l e a r i n g m e m b e r l i q u i d n e t w o r t h a f t e a d j u s t i n g f o r t h e i n m a r g i n a n d e x t r e m e s r i t i a l l o s s

m a r g i n r e q u i r e m e n t s m u s t b e a t l e a s t R s . 5 0 l a k h s a t a l l p o i n t s i n t i m e True False Both of the Above None of the above

Que 5. The system is normally made available for trading on all days except Saturday Sunday Holidays All of the above Que 6. In an Equal Hedge, the total value of the futures contracts involved is the same as the value of the spot market position. False True Both of the Above None of the above

Que 7. Currency risks could be hedged mainly through Forwards Futures Swaps and Options All of the above Que 8. In foreign exchange markets, in a currency pair, the _____ currency is called as the terms currency.

First Second Third Forth

Que 9. F(0,T) = S0(1+ r)^T/ (1+p)^T . This is a Spot Forward r& p Formula True False Both of the Above None of the above Que On January 31 2008, the spot USD/INR rate was 43.50. The US interest 10. rate was 3 percent, while the Indian interest rate was 6 percent. Find out the fair value of USD/INR Futures. The time to expiration was 90/360 = 0.25. 42.82 43.82 44.82 45.82

Que The objective of SPAN is to identify _____________ of all futures contracts 11. for each member. The Transaction Client Portfolio None of the above Que USD/INR Spot rate is 42.0025 and Forward rate 42.2525 and one month 12. futures are 43.5000, What will an arbitrager do? Sell Futures, Buy Spot

Sell Futures, Buy Forward Sell Forward, Buy Futures Sell Futures, Sell Spot

Que Trading members are required to keep an Interest Free Security Deposit 13. with CCL. True False Both of the Above None of the above Que A foreign exchange swap is a simultaneous purchase and sale, or sale and 14. purchase, of identical amounts of one currency for another with two different value dates. True False Both of the Above None of the above

Que Final Settlement rate would be the _______ Reference rate for the date of 15. expiry. Sebi RBI FMC FEDAI Que At Client Level the gross open position of the client across all contracts 16. should not exceed 6% of the total open interest or USD 10 million whichever is higher. True

False Both of the Above None of the above

Que The ________ has a strong international presence and over the years has 17. emerged as a premier currency, second only to the US Dollar Yen Euro GBP CHF Que INR means 18. Indian Rupees Indain Rates International Rupees None of the Above

Que The client margins (initial margin, extreme-loss margin,calendar-spread 19. margin, and mark-to-market settlements) are compulsorily collected and reported to the Exchange by the members. True False Both of the Above None of the above Que When the trading member does Trade in his own A/c it is entered as 20. PRO CLI

WHS FII

Que C M E o f f e r s 4 1 i n d i v i d u a l 21. F X f u t u r e s a n d 3 1 o p t i o n s c o n t r a c t s o n 1 9 c u r r e n c i e s , a l l o f w h i c h t r a d e e l e c t r o n i c a l l y o n t h e e x c h a n g e s C M E G l o b e x p l a t f o r m . I t i s t h e l a r g e s t r e g u l a t e d m a r k e t p l a c e f o r F X T r a d i n g True False Both of the Above None of the above Que When the trading member does Trade in his client A/c it is entered as 22. PRO CLI WHS FII

Que The Forward Rate is derived by adjusting the Spot rate for the interest 23. rate differential of the two currencies for the period between the Spot and the Forward date. True False Both of the Above None of the above

Que The Clearing Corporation assists the CM to monitor the intra-day imits set 24. up by a CM and whenever a TM exceeds the limits, it stops that particular TM from further trading. True False Both of the Above None of the above

Answers Que1 Ans1 Que2 Ans2 Que3 Ans3 Que4 In foreign exchange markets,in a currency pair, the second currency is called as the ____ currency. Term The __________ is the third most traded currency in the world. YEN The initial margin so computed would be subject to a minimum of 1.75% on the first day of currency futures trading and 1% thereafter. True T h e l i q a d j i n i e x t r e q l e a a l l True c l e a r i n g m e m b e i d n e t w o r t h a f s t i n g f o r t h e i a l m a r g i n a n d e m e l o s s m a r g i i r e m e n t s m u s t t R s . 5 0 l a k h s p o i n t s i n t i m e r s t e r

u u t r u s

n b e a t

a t

Ans4

Que5 Ans5 Que6 Ans6 Que7 Ans7 Que8 Ans8 Que9 Ans9 Que10

The system is normally made available for trading on all days except All of the above In an Equal Hedge, the total value of the futures contracts involved is the same as the value of the spot market position. False Currency risks could be hedged mainly through All of the above In foreign exchange markets, in a currency pair, the _____ currency is called as the terms currency. Second F(0,T) = S0(1+ r)^T/ (1+p)^T . This is a Spot Forward r& p Formula True On January 31 2008, the spot USD/INR rate was 43.50. The US interest rate was 3 percent, while the Indian interest rate was 6 percent. Find out the fair value of USD/INR Futures. The time to expiration was 90/360 = 0.25. 43.82 The objective of SPAN is to identify _____________ of all futures contracts for each member. Portfolio USD/INR Spot rate is 42.0025 and Forward rate 42.2525 and one month futures are 43.5000, What will an arbitrager do? Sell Futures, Buy Forward Trading members are required to keep an Interest Free Security Deposit with CCL. True A foreign exchange swap is a simultaneous purchase and sale, or sale and purchase, of identical amounts of one currency for another with two

Ans10 Que11 Ans11 Que12 Ans12 Que13 Ans13 Que14

different value dates. Ans14 Que15 Ans15 Que16 True Final Settlement rate would be the _______ Reference rate for the date of expiry. RBI At Client Level the gross open position of the client across all contracts should not exceed 6% of the total open interest or USD 10 million whichever is higher. True The ________ has a strong international presence and over the years has emerged as a premier currency, second only to the US Dollar GBP INR means Indian Rupees The client margins (initial margin, extreme-loss margin,calendar-spread margin, and mark-to-market settlements) are compulsorily collected and reported to the Exchange by the members. True When the trading member does Trade in his own A/c it is entered as PRO C M E o f f e r s 4 1 i n d i v i F X f u t u r e s a n d 3 1 o p t i o n s c o n t r a c t s o n c u r r e n c i e s , a l l o f w t r a d e e l e c t r o n i c a l l y t h e e x c h a n g e s C M E G l o b e x p l a t f o r m . I t t h e l a r g e s t r e g u l a t e m a r k e t p l a c e f o r F X T r a d i n g True d u a l 1 9 h i c h o n i s d

Ans16 Que17 Ans17 Que18 Ans18 Que19

Ans19 Que20 Ans20 Que21

Ans21

Que22 Ans22 Que23

When the trading member does Trade in his client A/c it is entered as CLI The Forward Rate is derived by adjusting the Spot rate for the interest rate differential of the two currencies for the period between the Spot and the Forward date. True The Clearing Corporation assists the CM to monitor the intra-day imits set up by a CM and whenever a TM exceeds the limits, it stops that particular TM from further trading. True

Ans23 Que24

Ans24

Que 1. In which of the following types of orders the client does not give any price or time limit for execution of order? Limit Order Limited Discretionary Order Stop loss Order Market Rate Order Que 2. Short hedge means underlying position of short in the foreign currency and Hedging position of long in currency futures True False Both of Above None of Above

Que 3. Short Hedger will be Short in the foreign currency Long in the foreign currency

Both of the Above None of the Above Que 4. The Exchange should have at least ________ members to start currency derivatives trading 10 25 40 50

Answers Que1 Ans1 Que2 Ans2 Que3 Ans3 Que4 Ans4 In which of the following types of orders the client does not give any price or time limit for execution of order? Market Rate Order Short hedge means underlying position of short in the foreign currency and Hedging position of long in currency futures False Short Hedger will be Long in the foreign currency The Exchange should have at least ________ members to start currency derivatives trading 50

Que 1. If a trader in the currency futures market expects INR will appreciate

against USD then he will sell USD/INR TRUE FALSE Both None of the above Que 2. The ______ business day of the month will be termed the Value date / Final Settlement date of each contract. Last thursday Last Friday Any of above None of the above

Que 3. In the Currency Derivatives segment, trading membercumclearing member, clear and settle their own trades as well as trades of other trading members (TMs). TRUE FALSE Both None of the above Que 4. _____________ receives the End of Day reports for all branches of the trading member Corporate Manger Delear Branch Manager None of the above

Que 5. The branch manager is a term assigned to a user who is placed under the ______

Dealer Trader Corporate Manager User Que 6. If a trader in the currency futures market expects INR will depreciate against USD then he will buy USD/INR TRUE FALSE Both None of the above

Que 7. Spread movement is based on following factors: Interest Rate Differentials Liquidity in Banking System & Inflation Monetary Policy Decisions (Repo, Reverse Repo and CRR) All of the Above Que 8. A hedger has an Overall Portfolio (OP) composed of (at least) 2 positions. One is Underlying position & second is Hedging position with negative correlation with underlying position Hedging position with positive correlation with underlying position Both None of the above

Que 9. Long hedge means Underlying position of long in the foreign currency and Hedging position of short in currency futures TRUE FALSE

Both None of the above Que The relationship between futures prices and spot prices can be 10. summarized in terms of what is known as the ___________ Profit Cost of Carry Fair Value All of the Above

Que Expiry date i.e the last trading day will be two business days prior to the 11. Value date / Final Settlement Date. TRUE FALSE Both None of the above Que If domestic currency appreciates against the foreign currency, the 12. exposure would result in loss for residents purchasing foreign assets and gain for non residents purchasing domestic assets. TRUE FALSE Both None of the above

Que Forward Contracts are __________ contracts 13. Customised Biletaral OTC

All of the Above Que An intra currency pair spread is a longshort position in futures on 14. different underlying currency pairs. Both typically have the same maturity. TRUE FALSE Both None of the above

Que Daily _______ settlement will be on a T +1 basis 15. Mark to Market Initial margin Brokerage None of the above Que Market Timing is for currency Futures Segment is from 9 am to 5 pm. 16. TRUE FALSE Both None of the above

Que Base price of the USD/INR Futures Contracts on the first day shall be the 17. theoretical futures price. TRUE FALSE Both None of the above

Que The Japanese Yen is the ______ most traded currency in the world. 18. First Second Third Fourth

Que Short hedge means Underlying position of long in the foreign currency and 19. Hedging position of short in currency futures TRUE FALSE Both None of the above Que If you are Bullish on INR you will 20. Buy USD Sell USD Both None of the above

Que In the Currency Derivatives segment, all open positions will be multiplied 21. by 2000 (Contract Size in USD) 1000(Contract size in USD) 3000(Contract size in USD) None of the above Que The most commonly used Swaps are

22. Interest Rate Swap Currency Swap Both of the above None of the above

Que Future Contracts are _____________ Contracts 23. Standardised Multi lateral Exchange Traded All of the Above

Answers Que1 Ans1 Que2 Ans2 Que3 If a trader in the currency futures market expects INR will appreciate against USD then he will sell USD/INR TRUE The ______ business day of the month will be termed the Value date / Final Settlement date of each contract. None of the above In the Currency Derivatives segment, trading membercumclearing member, clear and settle their own trades as well as trades of other trading members (TMs). TRUE _____________ receives the End of Day reports for all branches of the trading member

Ans3 Que4

Ans4 Que5 Ans5 Que6 Ans6 Que7 Ans7 Que8 Ans8 Que9 Ans9 Que10 Ans10 Que11 Ans11 Que12

Corporate Manger The branch manager is a term assigned to a user who is placed under the ______ Corporate Manager If a trader in the currency futures market expects INR will depreciate against USD then he will buy USD/INR TRUE Spread movement is based on following factors: All of the Above A hedger has an Overall Portfolio (OP) composed of (at least) 2 positions. One is Underlying position & second is Hedging position with negative correlation with underlying position Long hedge means Underlying position of long in the foreign currency and Hedging position of short in currency futures FALSE The relationship between futures prices and spot prices can be summarized in terms of what is known as the ___________ Cost of Carry Expiry date i.e the last trading day will be two business days prior to the Value date / Final Settlement Date. TRUE If domestic currency appreciates against the foreign currency, the exposure would result in loss for residents purchasing foreign assets and gain for non residents purchasing domestic assets. FALSE Forward Contracts are __________ contracts All of the Above

Ans12 Que13 Ans13

Que14

An intra currency pair spread is a longshort position in futures on different underlying currency pairs. Both typically have the same maturity. TRUE Daily _______ settlement will be on a T +1 basis Mark to Market Market Timing is for currency Futures Segment is from 9 am to 5 pm. TRUE Base price of the USD/INR Futures Contracts on the first day shall be the theoretical futures price. TRUE The Japanese Yen is the ______ most traded currency in the world. Third Short hedge means Underlying position of long in the foreign currency and Hedging position of short in currency futures TRUE If you are Bullish on INR you will Sell USD In the Currency Derivatives segment, all open positions will be multiplied by 1000(Contract size in USD) The most commonly used Swaps are Both of the above Future Contracts are _____________ Contracts All of the Above

Ans14 Que15 Ans15 Que16 Ans16 Que17 Ans17 Que18 Ans18 Que19 Ans19 Que20 Ans20 Que21 Ans21 Que22 Ans22 Que23 Ans23

Que 1. The proper size of the Hedging position in Modern Approach is Equal hedge Optimal hedge Partial Hedge None of the Above Que 2. Whenever the base currency buys more of the terms currency, the terms currency has ____________ Weakened Depreciated Both None of the Above

Que 3. Whenever the base currency buys more of the terms currency, the terms currency has weakened / depreciated TRUE FALSE Both None of the Above Que 4. The largest and the most liquid financial market in the world is the ___________. Equity Market Foreign Exchange Market Bond Market None of the Above

Que 5. All futures contracts for each member are markedtomarket(MTM) to the daily settlement price of the relevant futures contract at the end of each day. The profits/losses are computed as the difference between

The trade price and the day's settlement price for contracts executed during the day but not squared up The previous day's settlement price and the current day's settlement price for brought forward contracts The buy price and the sell price for contracts executed during the day and squared up. All of the above Que 6. Maximum age for admission as a Trading Member of Currency Futures Derivatives Segment is 21 years 18 years 25 years 60 years

Que 7. An applicant must be in a position to pay the membership and other fees, deposits etc, as applicable at the time of admission within three months of intimation to him of admission as a Trading Member or as per the time schedule specified by the Exchange TRUE FALSE Both None of the Above Que 8. At present, __________ are not permitted to participate in currency futures market. FII NRI Both None of the Above

Que 9. _______________ has issued guidance notes on accounting of index futures

contracts from the view point of parties who enter into such futures contracts as buyers or sellers ICFAI ICWA FPSB ICAI Que An inter currency pair spread is a longshort position in futures on 10. different underlying currency pairs. Both typically have the same maturity. TRUE FALSE Both None of the Above

Que Margins are paid on a ______ basis 11. T+1 Upfront T+2 T+3 Que Final Settlement rate would be the Reserve Bank (RBI) Reference rate for 12. the date of expiry. TRUE FALSE Both None of the Above

Que Whenever the base currency buys more of the terms currency, the base 13. currency has __________.

Apriciated Depreciated Volatile None of the Above Que A Buy order in a Stop Loss book gets triggered when the last traded price 14. in the Normal Market. Reaches or falls below the Trigger price Reaches or exceeds the Trigger price Gets immediate Triggered what ever is the rate There is no such Stop Loss Order

Que In foreign exchange markets, the base currency is the _____ currency in a 15. currency pair. First Second Third Fourth Que A foreign exchange swap is NOT a simultaneous purchase and sale, or sale 16. and purchase, of identical amounts of one currency for another with two different value dates. TRUE FALSE Both None of the Above

Que Liquidity in one currency is converted into another currency for a period 17. of time. TRUE

FALSE Both None of the Above Que Final settlement will be cash settled on ______ basis. 18. T+1 T+2 T+3 T+4

Que A Basic hedge is one where the changes in the spot prices are negatively 19. correlated with the changes in the futures prices and perfectly offset each other. TRUE FALSE Both None of the Above Que At Client Level the gross open position of the client across all contracts 20. should not exceed _____ of the total open interest or USD 10 million whichever is higher. 0.04% 0.05% 0.06% 0.07%

Que Hedging essentially helps transfer of _______. 21. Funds

Goods Risk None of the Above Que DQ (Disclose Quantity) Order is a type of 22. Time Condition Quantity Condition Price Condition No Condition

Que An Arbitrager Buys 5 lots of USD/INR January Futures @44.5000 and 23. sells March Futures @45.8500. After 25 days he squares up March position @43.3000 and January Futures at 42.8000. Find out the Arbitrage Profit / Loss ? 4250 -4520 4520 -4250

Answers Que1 Ans1 Que2 Ans2 The proper size of the Hedging position in Modern Approach is Optimal hedge Whenever the base currency buys more of the terms currency, the terms currency has ____________ BOTH

Que3 Ans3 Que4 Ans4 Que5

Whenever the base currency buys more of the terms currency, the terms currency has weakened / depreciated TRUE The largest and the most liquid financial market in the world is the ___________. Foreign Exchange Market All futures contracts for each member are markedtomarket(MTM) to the daily settlement price of the relevant futures contract at the end of each day. The profits/losses are computed as the difference between The trade price and the day's settlement price for contracts executed during the day but not squared up Maximum age for admission as a Trading Member of Currency Futures Derivatives Segment is 60 years An applicant must be in a position to pay the membership and other fees, deposits etc, as applicable at the time of admission within three months of intimation to him of admission as a Trading Member or as per the time schedule specified by the Exchange TRUE At present, __________ are not permitted to participate in currency futures market. Both _______________ has issued guidance notes on accounting of index futures contracts from the view point of parties who enter into such futures contracts as buyers or sellers ICAI

Ans5 Que6 Ans6 Que7

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Ans9

Que10 An inter currency pair spread is a longshort position in futures on different underlying currency pairs. Both typically have the same maturity. Ans10 TRUE Que11 Margins are paid on a ______ basis

Ans11 Upfront Que12 Final Settlement rate would be the Reserve Bank (RBI) Reference rate for the date of expiry. Ans12 TRUE Que13 Whenever the base currency buys more of the terms currency, the base currency has __________. Ans13 Apriciated Que14 A Buy order in a Stop Loss book gets triggered when the last traded price in the Normal Market. Ans14 Reaches or exceeds the Trigger price Que15 In foreign exchange markets, the base currency is the _____ currency in a currency pair. Ans15 First Que16 A foreign exchange swap is NOT a simultaneous purchase and sale, or sale and purchase, of identical amounts of one currency for another with two different value dates. Ans16 FALSE Que17 Liquidity in one currency is converted into another currency for a period of time. Ans17 FALSE Que18 Final settlement will be cash settled on ______ basis. Ans18 T+2 Que19 A Basic hedge is one where the changes in the spot prices are negatively correlated with the changes in the futures prices and perfectly offset each other. Ans19 FALSE Que20 At Client Level the gross open position of the client across all contracts should not exceed _____ of the total open interest or USD 10 million whichever is higher.

Ans20 0.06% Que21 Hedging essentially helps transfer of _______. Ans21 Risk Que22 DQ (Disclose Quantity) Order is a type of Ans22 Quantity Condition Que23 An Arbitrager Buys 5 lots of USD/INR January Futures @44.5000 and sells March Futures @45.8500. After 25 days he squares up March position @43.3000 and January Futures at 42.8000. Find out the Arbitrage Profit / Loss ? Ans23 4250

Que 1. On 15th Decmber Mr.Anil bought a April USDINR futures contract which cost him Rs.44000. Each USDINR futures contract is for delivery of USD1000. The RBI reference rate for final settlement was fixed as 44.10. How much profit/loss did he make? Profit 6000 Loss 300 Loss 4500 Profit 100 Que 2. When the Price Changes showing Improvement in the rate what color does it appear. Yellow Orange Red Blue

Que 3. In the case of USD/INR, spot value is Same Day T+2 T+4 T+3 Que 4. When any order enters the trading system, it is a/an _____ order Active Passive Useless Best

Que 5. A dealer for Currency Derivatives market segment has to clear NISMSeriesI _______________ Currency Derivatives Cerifification Exams Capital Market Dealers Module exams AMFI Module Exams Depository Module Exams Que 6. _________ form a key part of the risk management system Trading Broking inquiry Margins

Que 7. Each order has a distinctive order number and a unique ______ on it. ID

Time stamp Vaule Time Que 8. In the case of the USDINR currency futures contract the tick size shall be 0.25 paise or 0.0025 Rupee. True False

Que 9. In India, currency futures can be cash settled or settled by delivering the respective obligation of the seller and buyer. True False Que A GTC order is a ___________ condition order 10. Price No Condition Time Quantity

Que Currency futures are a _________ product 11. Linear Non-Linear Both of the above None of the Above Que The unique client code is assigned with the use of Income Tax Permanent 12. Account Number (PAN) number.

True False

Que The Exchange imposes stringent penalty on members who do not collect 13. margins from their clients. True False Que Internationally, currency futures can be cash settled or settled by 14. delivering the respective obligation of the seller and buyer. True False

Que The Standardized currency futures shall have the following features: 15. Only USD-INR contracts are allowed to be traded.& The size of each contract shall be USD 1000. The contracts shall be quoted and settled in Indian Rupees. The maturity of the contracts shall not exceed 12 months. All of the Above Que If domestic currency depreciates against the foreign currency, the 16. exposure would result in gain for residents purchasing foreign assets and loss for non residents purchasing domestic assets. True False

Que __________ can be defined as the futures price minus the spot price 17. Basis

Term Currency None of the Above Que The relationship between futures prices and spot prices can be 18. summarized in terms of what is known as the cost of carry. True False

Que The Exchange will disseminate alerts whenever the gross open position of 19. the client exceeds _______ of the total open interest at the end of the previous day s trade. 0% 0% 0% 0% Que CME FX Futures are traded by _________________. 20. commercial banks investment banks hedge funds All of the above

Que Clearing Member sets limits for ________ 21. Corporate manager Trading Member SEBI RBI

Que First major currency is _________ 22. Eur GBP INR USD

Que The membership of the currency futures market of a recognised stock 23. exchange shall be separate from the membership of the equity derivative segment or the commodity exchange. True False Que A dealer can view and perform order and trade related activities only for 24. ________ Trading Member Himself Exchange Branch

Answers Que1 On 15th Decmber Mr.Anil bought a April USDINR futures contract which cost him Rs.44000. Each USDINR futures contract is for delivery of USD1000. The RBI reference rate for final settlement was fixed as 44.10. How much profit/loss did he make? Profit 100 When the Price Changes showing Improvement in the rate what color

Ans1 Que2

does it appear. Ans2 Que3 Ans3 Que4 Ans4 Que5 Ans5 Que6 Ans6 Que7 Ans7 Que8 Ans8 Que9 Ans9 Que10 Ans10 Que11 Ans11 Que12 The unique client code is assigned with the use of Income Tax Permanent Account Number (PAN) number. Blue In the case of USD/INR, spot value is T+2 When any order enters the trading system, it is a/an _____ order Active A dealer for Currency Derivatives market segment has to clear NISMSeriesI _______________ Currency Derivatives Cerifification Exams _________ form a key part of the risk management system Margins Each order has a distinctive order number and a unique ______ on it. ID In the case of the USDINR currency futures contract the tick size shall be 0.25 paise or 0.0025 Rupee. True In India, currency futures can be cash settled or settled by delivering the respective obligation of the seller and buyer. False A GTC order is a ___________ condition order Time Currency futures are a _________ product

Ans12 Que13 Ans13 Que14 Ans14 Que15 Ans15 Que16

True The Exchange imposes stringent penalty on members who do not collect margins from their clients. True Internationally, currency futures can be cash settled or settled by delivering the respective obligation of the seller and buyer. True The Standardized currency futures shall have the following features: All of the Above If domestic currency depreciates against the foreign currency, the exposure would result in gain for residents purchasing foreign assets and loss for non residents purchasing domestic assets. False __________ can be defined as the futures price minus the spot price Basis The relationship between futures prices and spot prices can be summarized in terms of what is known as the cost of carry. True The Exchange will disseminate alerts whenever the gross open position of the client exceeds _______ of the total open interest at the end of the previous day s trade. Skipped CME FX Futures are traded by _________________. All of the above Clearing Member sets limits for ________ Trading Member First major currency is _________

Ans16 Que17 Ans17 Que18 Ans18 Que19

Ans19 Que20 Ans20 Que21 Ans21 Que22

Ans22 Que23

USD The membership of the currency futures market of a recognised stock exchange shall be separate from the membership of the equity derivative segment or the commodity exchange. True A dealer can view and perform order and trade related activities only for ________ Branch

Ans23 Que24 Ans24

Que 1. The amount that must be deposited in the margin account at the time a futures contract is first entered into is known as Cost of Carry Initial Margin MTM Basis Que 2. If you are Bullish on USD you will Buy USD Sell USD Buy INR None of the Above

Que 3. When the underlying is an exchange rate, the contract is termed a Commodities futures contract Equities futures contract

Currency futures contract Index futures contract Que 4. The Committee on Fuller Capital Account Convertibility had recommended that currency futures may be introduced subject to risks being contained through proper trading mechanism, structure of contracts and regulatory environment. True False

Que 5. The Clearing Corporation of the Exchange, on an ongoing basis and at least once in every _____ months, conducts backtesting of the margins collected visvis the actual price changes 6 3 9 12 Que 6. Contract size, In the case of USD/INR it is USD _______ 100 10 1000 10000

Que 7. The open positions of the members are marked to market based on contract settlement price for each contract. The difference is settled in cash on a T+1 basis True False Que 8. The _______ business day would be taken for Final Settlement date of each

contract for Interbank Settlements in Mumbai. Last Thursday Last First day Either of the above

Que 9. BID rate is Buyers price Sellers Price Auction price Future price Que In the Currency Derivatives segment, tradingcumclearing member, clear 10. and settle their own trades as well as trades of other trading members (TMs). True False

Que The final settlement price is the RBI reference rate for the last trading day 11. of the futures contract. True False Que A futures contract is a standardized contract 12. Yes No

Que The last business day would be taken for Final Settlement date of each 13. contract for Interbank Settlements in ________

Mumbai Agra Kolkatta Delhi Que A buy position '20000@ 40.0000"means ______ contracts bought at the 14. rate of Rs. 40.0000 40 20 325 2000

Que Who sets limit for Trading member 15. Corporate manager Clearing Member SEBI FMC Que The Swiss Franc is the only currency of a major European country that 16. belongs neither to the European Monetary Union nor to the G7 countries No Yes

Que All open positions will be multiplied by _____(contract size in USD) to 17. arrive at the open position in USD terms 10 100 1000 10000

Que A Forwad contract is a customised contract 18. True False

Que Clients have to pay _______ types of Margin 19. 1 2 4 5 Que Futures markets are designed to solve the problems that exist in the 20. ____________. spot markets forward markets options markets All of the above

Que The currency futures contracts on the SEBI recognized exchanges have 21. onemonth, twomonth, and threemonth up to twelvemonth expiry cycles. Hence, these exchanges will have 12 contracts outstanding at any given point in time. True False Que ASK or OFFER is 22. Buyers price

Sellers Price Auction price Future price

Que Rs.42.2500. One tick move on this contract will translate to _______ or 23. _______ depending on the direction of market movement. Rs.42.2475 Rs.42.2525 Rs 42.3500 Rs 42.1500 Que Currency futures are used to hedge import/export risks. 24. True False

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Answers Que1 Ans1 Que2 Ans2 Que3 The amount that must be deposited in the margin account at the time a futures contract is first entered into is known as Initial Margin If you are Bullish on USD you will Buy USD When the underlying is an exchange rate, the contract is termed a

Ans3 Que4

Currency futures contract The Committee on Fuller Capital Account Convertibility had recommended that currency futures may be introduced subject to risks being contained through proper trading mechanism, structure of contracts and regulatory environment. True The Clearing Corporation of the Exchange, on an ongoing basis and at least once in every _____ months, conducts backtesting of the margins collected visvis the actual price changes 3 Contract size, In the case of USD/INR it is USD _______ 1000 The open positions of the members are marked to market based on contract settlement price for each contract. The difference is settled in cash on a T+1 basis True The _______ business day would be taken for Final Settlement date of each contract for Interbank Settlements in Mumbai. Last BID rate is Buyers price In the Currency Derivatives segment, tradingcumclearing member, clear and settle their own trades as well as trades of other trading members (TMs). True The final settlement price is the RBI reference rate for the last trading day of the futures contract. True A futures contract is a standardized contract

Ans4 Que5

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Ans7 Que8 Ans8 Que9 Ans9 Que10

Ans10 Que11 Ans11 Que12

Ans12 Que13 Ans13 Que14 Ans14 Que15 Ans15 Que16

Yes The last business day would be taken for Final Settlement date of each contract for Interbank Settlements in ________ Mumbai A buy position '20000@ 40.0000"means ______ contracts bought at the rate of Rs. 40.0000 Skipped Who sets limit for Trading member Clearing Member The Swiss Franc is the only currency of a major European country that belongs neither to the European Monetary Union nor to the G7 countries Yes All open positions will be multiplied by _____(contract size in USD) to arrive at the open position in USD terms 1000 A Forwad contract is a customised contract True Clients have to pay _______ types of Margin 1 Futures markets are designed to solve the problems that exist in the ____________. All of the above The currency futures contracts on the SEBI recognized exchanges have onemonth, twomonth, and threemonth up to twelvemonth expiry cycles. Hence, these exchanges will have 12 contracts outstanding at any given point in time.

Ans16 Que17 Ans17 Que18 Ans18 Que19 Ans19 Que20 Ans20 Que21

Ans21 Que22 Ans22 Que23 Ans23 Que24 Ans24

True ASK or OFFER is Sellers Price Rs.42.2500. One tick move on this contract will translate to _______ or _______ depending on the direction of market movement. Rs.42.2525 Currency futures are used to hedge import/export risks. True