1.

An Indian investor has invested ₹3,90,000 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 the then existing rate of ₹62. What would be his real returns (returns in INR terms)?

2. _______ is TRUE for Exchange Traded Derivatives.

3.

A significantly better than expected Consumer Price Index from United Kingdom (UK) will result in what type of movement of GBP against other countries?

4. M/s Sun Exporters hedges 10,000 USD by buying September 2017 put option at a strike of ₹63.00 when price was ₹0.44/0.46. The company receives USD in its account on 15th September. So the company decided to cancel the option on 15th September when the price for the same contract was ₹0.27/0.28. How much loss did the company make on cancelling the put option if latest available RBI reference rate was ₹62.50?

5. A currency trader has strong bullish view on USDINR. He also expects a decrease in volatility from the current levels in the coming days. He wants to execute both these views and therefore what option strategy is he likely to use?

6.

What is the process of actual pay-in / pay-out of mark to market margin or profit/loss on cancellation or on maturity of futures contract called?

7. What are the main features of a managed float currency?

8. What is the relationship between limit price and trigger price for a stop-loss BUY order?

9. An Immediate or Cancel (IOC) order _______.

10. Assume that the one-year interest rate is 1% in US, 2% in UK and 7% in India. If current GBPINR spot rate 91.60, what would be the one-year future rate of GBPINR?

11.

USDINR three month future is quoting at 65.50 and six month is quoting at 66.10. Mr. Bharat expects that after a month the three month future should quote at 65.20 and the six month should quote at 66. If Mr. Bharat executes a spread trade and the view goes right, how much profit will he make?

12.

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?

13. Heena is a student of economics who believes that GBP should appreciate against INR in the next few months. She decides to execute this view using currency futures. Given this scenario, what type of market participant would this student be?

14. A trader initiates a long position in USDINR futures contract at a price of 72 by buying 30 lots. At expiry of contract, the settlement price was 71.70. How much profit/loss (in ₹) did he make in this transaction?

15. Which of these conditions have to be satisfied for an AD category 1 bank to become a trading and clearing member on any of the recognized currency futures exchanges?

16. The important market which open around afternoon of India time is/are ______.

17. A trading member buys September USDINR futures at various price points over two days. He buys 20 lots at 74.70 at 10:30 AM on day 1, 10 lots at 2 PM on day 1 and 20 lots at 74.30 at 11:30 AM of day 2. On day 3, he squares off 20 lots at 74.70. Using FIFO method, how much profit/loss has he realized on the squared off transaction? (Ignore transaction costs)

18. Mrs. Soni has invested INR 100,000 in an Indian corporate bond for a year giving a return of 9% in one year. She plans to use the proceeds from the maturity of corporate bond to fund her daughter’s education in US. At the time of investing in corporate bond, USDINR spot was 73 and one year premium was 5%. She decides to hedge currency risk using USDINR one year futures. At the end of one year, how many USD can she remit to her son?

19. Mr. Balbir Singh has invested USD 8,000 in US equities and got an exchange price of 73 from its bank for converting INR into USD. In the next two years his investments in US equities appreciated in value to USD 9,000. He sold off his portfolio and repatriated the capital and profits to India. His effective return after considering currency risk on the investment turned out to be 12%. What exchange price would Mr. Balbir have received at the time of converting his profits from USD into INR?

20. A trading member (TM) has two clients “X” and “Y” and he also does proprietary trading in currency futures. On day 1, TM buys 20 lots of USDINR one month futures and also sells 2 lots of the same contract on the same day in his proprietary book. On the same day, client “X” buys 12 lots of USDINR one month futures and also sells 2 lots of the same contract while client “Y” buys 12 lots and sells 2 lots of USDINR one month futures. What would be the open position (in USD) of the Trading member, client “X” and client “Y” respectively at the end of day 1?

21.  A trader sold 20 lots of USDINR June futures at 86.50. Later, the INR appreciated by 100 ticks and the trader closed the position. What is the resulting profit or loss from this trade?

22.

A trading member has three clients — two in the currency futures segment and one in the currency options segment. At the end of the trading day:

1. One futures client holds a short position of USD 2,000

2. The second futures client holds a long position of USD 6,000

3. The options client holds a long position of USD 5,000
   What is the total gross open position of the trading member for the purpose of open position monitoring?

23. Avantika purchases 10 lots of 1-month EURINR futures at a price quoted as 100.60/100.90. After one week, he closes out 5 of these lots when the price is quoted at 99.35/99.45. What is the profit or loss in Rupees on the portion of the position that was squared off?

24. A trader observes that the 3-month EURINR futures contract is trading at 101.50 while the forward rate for the same maturity is 101.10. To take advantage of this price difference, he sells the futures contract and simultaneously buys in the forward market. Which category of market participant does this strategy represent?

25. If EURUSD quotes are 1.1645/1.1650 and USDINR are 85.35/85.40 then cross EURINR offer rate is _____.

26. A trader holds a strong bearish outlook on USD-INR and anticipates a notable decline in volatility in the near future. Wishing to express both views, he prefers to use a plain vanilla option strategy. Which option position is he most likely to take?

27.  Which method is used to determine the closing price of a GBPINR futures contract?

28. In the OTC FX market, a settlement with a value date of T+2 (where T is the trade date) is known as which of the following?

29. If a taxpayer is opting for the presumptive taxation scheme under section 44AD (subject to total turnover not exceeding ₹2 crores), he can declare the profit at the rate of ____ of such turnover in case of receipts in cheque or any digital modes or ____ of turnover in case of cash receipts.

30. Futures contracts and options contracts differ in terms of the rights and obligations of the involved parties. True or False?

31. A trader sold USDINR one month future at ₹85.10. The interest rate gap between US and India was approx. 10% per annum with the Indian rates being higher than US rates. What was the USDINR spot rate at the time of selling futures?

32. Mr. Mohit sells 10 lots of GBPINR 1 month futures when price was 99.60/99.90 and squares off five lots after a week when price was 98.65/98.85. Calculate the profit or loss on the part of the transaction that was squared off?

33. Which of the following best describes the timing for collection of daily mark to market settlement?

34. Mr. Alok, a currency trader, is of the view that interest rate in India can rise while interest rate in USA can remain flat. If everything else remains the same, what currency futures trade strategy would be beneficial to him if his view comes correct?

35. A currency research analyst is of the view that USD should depreciate against INR in the next few months. She decides to execute this view using currency futures. Given this scenario, what type of market participant would this analyst be?

36. In the interbank market, when GBP and EUR is traded against USD, then which is the quotation currency?

37. Mr. Inderneel has strong bearish view on EURINR and he also expects significant increase in volatility from current levels in the coming days. He wants to execute both these views but would like to stick to a plain vanilla option position. What option position is he likely to execute?

38. Mr. Vikram expects interest rate in India to increase while interest rate in US to decline in next three months. If everything else remains same, what calendar spread position is likely to be profitable if Mr. Vikram’s views come correct?

39. A trigger price is _____ limit price for a stop loss buy order.

40. If GBPINR spot is 102.50 and the 3-month forward premium is 0.60, the outright forward rate is:

41. _____ is the process through which Clearing Corporation becomes a party to every trade that is executed on the Exchange.

42. Identify which of these transactions is/are considered as a speculative transaction?

43. A ______ order is classified as price related condition.

44.

In the trading system of exchanges, all orders come as ____ orders into the order book. If they get a match, they will be executed immediately; else they will enter the order book according to their price and time as ______ orders.

45. One year interest rate in USA is 4% and in Japan it is 0.5%. If current USD/JPY spot rate is 95.65, then the one year future rate of USD/JPY will be

46. A call option of strike price 50 is available at premium of 0.75 when the spot price is 50.50. If the spot price increases the premium will decline.

47. What is the market timing for Exchange Traded Currency Derivatives in India?

48. US has a lower interest rate than India, so the currency future rates of USD will be ______ to INR.

49. Of the below options, which one is true for Exchange Traded Derivatives?

50.

If the spot price of EUR/INR is 70, what will be the moneyness of a short EUR/INR Put option on a strike price of 68?