1.

Sometimes the client may deposit a lump sum amount with the trading member in respect of mark-to-market margin money instead of receiving/paying mark-to-market margin money on daily basis should be debited to an appropriate account, Deposit for mark-to- market margin account. True False Both of Above None of Above 2. Payments made or received on account of daily settlement by the client should be credited/debited to the bank account and the corresponding debit or credit for the same should be made to an account titled as Mark-to-market margin - currency futures account. True False Both of Above None of Above 3. In cases where instead of paying initial margin in cash, the client provides bank guarantees or lodges securities with the member, a disclosure should be made in the notes to the financial statements of the client True False Both of Above None of Above 4. At the balance sheet date the balance in the Initial margin currency futures account should be shown separately under the head Current assets Current liabilities Revenue Either of the Above 5. A sub-broker should enter into a _______ agreement with his client and with the main broker specifying the scope of rights and obligations of the broker, sub-broker and such client of the sub-broker Tripartite Tryparty Tripaty Tripathi 6. Loss on derivative transactions can be carried forward for a period of 8 assessment years. True False Both of Above None of Above 7. Loss on derivative transactions can be set off against any other income during the year. In case the same cannot be set off, it can be carried forward to subsequent assessment year and set off against any other income of the subsequent year True False Both of Above None of Above 8. Arbitration is a quasi judicial process of settlement of disputes between Trading Members, Investors, Subbrokers & Clearing Members

and between Investors and Issuers (Listed Companies). True False Both of Above None of Above 9. SEBI has instructed the exchange to have _______ committees so that differences, disputes and claims between trading members and investors can be settled effectively and in a short time. Arbitrage Hedging Speculation Arbitration 10. The number of currency futures contracts having open position, number of units of currency futures pertaining to those contracts and the daily settlement price as of the balance sheet date should be disclosed separately for long and short positions, in respect of each series of currency futures. True False Both of Above None of Above 11. The contract price of the contract that is squared-up should be determined using _______ method for calculating profit/loss on squaring-up. LIFO FIFO FILO All of the Above 12. NPA AND FEDAI Non prepared Assets and Foreign Exchange Developers Association of India Non Prepared Association and Foreign Exchange During Association of India Non Performing Assets and Foreign Exchange Dealers Association of India None of the above 13. 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 False True Both of Above None of Above 14. In the Currency Derivatives Segment Clients' positions are arrived at by summing together _____positions of each individual client. gross (buy + sell) net (buy - sell) net or gross clients positions are not taken into account in the Currency Derivatives Segment 15. If an order does not find a match in the trading system, it is _____ removed from the trading system after seven days removed from the trading system at the end of the day removed from the trading system on the expiry day removed from the trading system when the buyer / seller deletes

16. __________ take advantage of Mispricings in the markets Hedgers Volatility Arbitragers Speculators 17. Both Forwards and Futures are traded at the NSE CD True False Both of Above None of Above 18. The standardised items in a futures contract are ______. The date and the month of delivery The units of price quotation and minimum price change Location of settlement All of the above 19. Which type of Derivatives contracts are generally not regulated by a regulatory authority and the exchange's self-regulatory organization, although they are affected indirectly by national legal systems, banking supervision and market surveillance? Stock Futures Exchange traded derivatives Over the Counter Derivatives Commodity derivatives 20. A payer swaption is an option to pay ______ and receive _____ Fixed, Floating Floating, Fixed Unlimited, Unlimited Limited, Limited 21 The maximum brokerage chargeable by a trading member in relation to trades effected in the contracts admitted to dealing on the Currency Futures segment of NSE is fixed at ________ 1% 1.5% 2% 2.5% 22. Calculate the optimal hedge ratio. Change in spot rate is 3.75. Change in futures price is 3.6. Value of the portfolio is 80,000. Value of one futures contract : 1,000. 90 80 84 None of the above

2. On October 1, 2008, an Indian importer enters into a contract to import 200 barrels of oil with payment to be made in the US . dollar (USD) on January 20, 2009. The price of each barrel of oil has been fixed at USD 100/barrel at the prevailing exchange rate of 1 USD = INR 40.00, while the January 2009 futures contract is trading at 41.00. He decides to hedge his position by _________ USDINR futures contract. On January 20, 2009, when he has to make payment for his import the spot rate is 42.00 and the January 2009 futures contract is trading at 42.90. What is the effective price of one barrel of oil in INR terms for him fafter hedging using the MCX-SX platform? Selling 20, 4010

Buying 20, 4010 Selling 20, 4100 Buying 10, 4000

24.You need to buy USD against Rupee. Of the following quote which is the best rate 45/45.05 . 45/45.0525 45/45.0025 all of the above

25. If you expect the US Interest rate to increase. You will Buy USD/ INR Sell USD/ INR Either 1 or 2 None of the above

26. Which one of the following statements about MEMBERSHIP is least accurate? The trading member will be subject to a balance sheet networth requirement of Rs 10 crore. The clearing member would also be subject to a liquid networth requirement of Rs 50 lakh The trading members and sales persons in the currency futures market must have passed a certification programme that is considered adequate by SEBI. All the above

27.The ___________________ provides the Reserve Bank with overriding jurisdiction over development and management of foreign exchange markets. . SEBI ACT SCRA ACT Foreign Exchange Management Act, 1999(FEMA) None of the above

. 28. The mark to market calculated by the exchange at the end of the day will be minimum for speculative position hedged positions

arbitrage positions None of the above

29. In order to inform the member sufficiently in advance, MCX-SX trading system tracks the ______ of the members on real time basis and alerts them at __________ utilisation level. MTM limit; 50%,60%& 90% margin limit; 50%,75%& 100% MTM limit; 60%,70%& 100% margin limit; 60%,75%& 90%

30. An Indian importer enters into a contract to import 10 barrels of oil after 6 months. The price of barrel is $100. Spot rate is Rs 45/$. Futures rate is Rs 45.1. Calculate the number of contracts to be sold or purchased 45,000 45,100 1 2 31. Long 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

32.The best buy order in the trading system is the order with the ________? Lowest quantity Highest quantiy Lowest price Highest price

33. In the Currency Derivatives segment clients` positions are arrived at by summing together _________ positions of each individual client. gross(buy+ sell) net(buy- sell) net or gross Clients` positions are not taken into account in the Currency Derivatives segment

34. The directions issued under section 45W of the Reserve Bank of India Act, 1934 are titled Currency Futures (Reserve Bank) Directions, 2008 came into force w.e.f. 6th ________ August, 2008. September, 2008 October, 2008 November, 2008

35. Investors grievances are redressed by the Exchange through A. A systematic process of managing investors grievances by Exchanges regularly reviewed by SEBI B. The Exchange imperative as how it wants to deal with them C. A systematic mechanism of Arbitration at every Exchange to deal with these complaints D.A and C 36. Code of conduct are rules and guidelines for_______ A. Brokers B. Sub brokers C. ETCF Trading Members specifically D. All of the above 37. Loss on non speculative transaction which remains after set off against profit on non speculative transaction, can be set off against other business income also. A. False B. True C. It depends on SEBI D. None of the above 38. Which of the followings are the eligibility criteria for bank to become a member? A. Minimum CRAR of 10 per cent B. Net NPA should not exceed 5 per cent C. Made net profit for last 5 years D. All of the above 39. Which of the following persons are eligible to become Professional Clearing Member (PCM): A. Banks B. SEBI Registered custodians C. Individuals D. Both A and B 40. Which of the following statement is correct? A. The exchange shall have a balance sheet net worth of at least Rs.500 crores. B. If Trading Member/Clearing Member is chairman of the Governing Council of The Exchange, then he shall not carry on any trading/clearing business on any Exchange during his tenure as chairman. C. FIIs and NRIs are permitted to participate in currency future market. D. Both A & B

41. To become the member of the exchange, banks should have minimum net worth of _________. A. Rs.100 crores B. Rs.500 crores C. Rs.250 crores D. Rs.1000 crores 42. Which of the following entities are not eligible to apply for membership? A. Corporations, Companies or Institutions B. Individuals and Partnership C. Foreign Institutional Investors D. Such other person as may be permitted under the Securities Contracts (Regulation) Rules 1957. 43. The price range on a trading day for Currency futures is +/-________ of the base price for contract tenure greater than 6 months A. 2% B. 3% C. 4% D. 5% 44. The minimum liquid net worth for TM required at any given point on time is __________ A. 50 Lakhs B. 25 Lakhs C. 75 Lakhs D. 100 Lakhs 45. Trading member "A" has his proprietary position as 50 buys and 60 sells whereas his client X has 50 Buys and 60 Sells. What is the open position at members' level? A.Nil B.40 Contracts C.20 contracts D.220 contracts 46. Positions limits is a function of _____________ A. Volume B. Price C. Open Interest D. Net profit 47. The maximum Mark to Market loss limit for currency futures is ____ A.75% of total deposits B.100% of total deposits C.60% of total deposits D.90% of total deposits 48. In case of sell stop loss the trigger price is _____________ the limit price A. less than B. more than C. more than or equal to D. less than or equal to 49. Margins form a key part of the ________ Trading Management System Broking Management System Exchange Management System Risk Management System 50. Day order is____________ A. Valid in the system till end of the day (if not executed) B. Not valid in the system till end of the day (if not executed)

C. Valid in the system till expiry of the contract (if not executed) D. None of the above 51. Which of the following statement is most accurate? A. Expiry day of the contract is the last day of the month B. Expiry day is the 5thworking day prior to Settlement Day of the Month C. Final settlement day is the last working day of the month D. None of the above 52. The final settlement reference rate for the currency futures contract is A. weighted average of all trades done in last 30 minutes B. weighted average of all trades done in last 5 minute C. weighted average of last 5 trades D. RBI reference rate of expiry day 53. The last trading day in the currency futures contract is_________ A. expiry day of the contract B. Two working days prior to the last working day C. both A & B D. none of the above 54. The forward price for USD/INR is 44.58 and future price for USD/INR is 45.10, calculate the arbitrage profit or loss on 88 contracts (1 lot = 1000 USD) if the expiry price is 45.02. A. 38720 B. 42670 C. 45760 D. None of the above 55. A Spread is__________________. A. Difference between opening price and closing price of the future contract B. Difference between cash price and futures price of an asset C. Difference between prices of two futures contracts D. Difference between highest and lowest price of the futures contract 56. An Indian Exporter wants to go for an equal hedge position with an exposure of $10000; will be going A. Long on 10 USD/INR Futures Contracts B. Short on 100 USD/INR Futures Contracts C. Short on 10 USD/INR Futures Contracts D. None of the above 57. Mr. R sells 5 tons of Aluminium Futures for USD 7000 per ton when exchange rate was Rs.49/USD. Two month later, he decides to square off his position and the exchange rate by then had changed to Rs.47.5/USD. The profit or loss of Mr. R would be A. Profit of Rs. 10500 B. Loss of Rs. 10500 C. Profit of Rs. 52500 D. Loss of Rs. 52500 58. Deriving forward rates given the spot is... A. Possible using a Term base formula B. Possible using spot-forward r&p formula C. Possible using continuous compounding formula D. All of the above 59. On 3rd August 2009, the USD/INR spot rate at Rs 47.93, the futures price is at Rs 48.6422, the interest rate in INR is 6%. What would be the interest rate in USD if the contract has 181 days to its expiry? A. 3% B. 3.55% C. 2.89% D. 4% 60. If Futures price is equal to Spot+Points.

Suppose the USD/INR spot rate is currently at Rs.48.1150, the interest rate in the base currency and terms currency is 3.5% and 6% respectively. What would be the points, if the contract has 90 days to its expiry? A.2.981 B.0.8085 C.0.029851 D.0.2981 61. Derivatives are settled at.... A. Cost B. A future date C. An exchange D.A bank 62. Which of the following statements is correct? A. Increase in inflation rates leads to strengthening of INR B. Increase in growth rate (GDP), leads to weakening of INR C. Decrease in manufacturing output lead to strengthening ofINR D. Increase in interest rates could lead to strengthening INR 63. The USD took on the role of a vehicle currency mainly because.... A. The United States is the most powerful nation B. It is widely traded against other currencies C. The USD is backed by gold reserves D. All of the above 64. Which of the following is considered to be a more stable currency A. US Dollar B. EURO C. Swiss Frank D. British Pound 65. The second and third most traded currencies are A. EURO and Japanese Yen B. EURO and British Pound C. British Pound and Japanese Yen D. US Dollar and EURO 66. In foreign exchange markets the base currency is the.... A. Term currency B. First currency in the currency pair C. Second currency in the currency pair D.US Dollar 67. The settlement convention for USD/CAD is T+1 T+2 T+3 None of the above 68. The standard settlement convention for spot trade is...... A. Trade date B. Trade date + 1 C. Trade date + 2 D. Trade date + 3 69. The most commonly used Swaps are Interest Rate Currency Both of the Above None of the Above

70. An intra currency pair spread is a long-short position in futures on different underlying currency pairs. Both typically have the same maturity. False True Both of Above None of Above 71. Expiry date i.e the last trading day will be _____ business days prior to the Value date / Final Settlement Date. One Two Three Four 72. The relationship between futures prices and spot prices can be summarized in terms of what is known as the ___________ Profit Cost of Carry. Fair Value All of the above 73. 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. True False Both of Above None of Above 74. 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 75. If a trader in the currency futures market expects INR will depreciate against USD then he will buy USD/INR True False Both of Above None of Above 76. 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 Either of the above None of the Above 77. _____________ receives the End of Day reports for all branches of the trading member Corporate manager Dealer Branch manager None of the above 78. The branch manager is a term assigned to a user who is placed under the Dealer Trader

Corporate Manager User 79. _________ means locking in a profit by simultaneously entering into transactions in two or more markets Hedging Trading Arbitrage Speculation 80. _______ Day is Last working day of the month (subject to holiday calendars) Expiry Trading Buying Selling 81. An ______ Hedge is a hedging strategy which yields the highest level of utility to the hedger. Basic Partial Optimal All of the Above 82. An intra-currency pair spread consists of one long futures and one short futures contract. Both have the same underlying but different maturities True False Both of Above None of Above

83. Extreme loss margin is computed at 1% on the mark-to-market value of the Gross Open Position. True False Both of Above None of Above 84. A derivatives contract cannot exist without an ________ Exchange Underlying be it equity, interest rate etc. increase in volatility increase in arbitrage 85. Hedging is used for removal of Unwanted ________ Var Exposure or Risk Profits Shares 86. Disclosed Quantity is a ___________ condition Quantity or Volume Condition Time Condition Price Condition None of the Above 87. The first stock index futures contract was traded at _________ Kansas City Board of Trade

National stock Exchange Bombay stock Exchange None of the above 88. A Forwad contract is a standardized contract True False Both of Above None of Above 89. The calendar spread margin is at a value of _______ for all months of spread Rs.50 Rs.150 Rs.250 Rs.500 90. 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 True False Both of Above None of Above 91. 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

92. ________ loss is calculated by marking each transaction in security to the closing price of the security at the end of trading Mark to market M2M Daily Net Total 93. _______ currencies are usually needed for payments across national borders INR Foreign Dollar Euro

94. 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 of Above None of Above 95. If you are Bearish on USD you will Buy USD Sell USD Both of the Above None of the above