1 Introduction to Foreign Exchange: 2.

Exchange Market,
3.Exchange Rates and Types 4.FEMA, FEDAI, FIMMDA

1 The FEDAI was established in 1958 as ____in India.

a) An association of all banks
b) An association of all authorized dealers
c) An association of exporters
d) An association of all importers
2 Under FEMA, all ___ account transactions are free unless
specifically restricted.
a) Current
b) Capital
c) Vostro
d) Nostro
3 The responsibility for administering FEMA is vested with
the _____.
a) Reserve Bank of India
b) Foreign Exchange Regulation Act
c) Foreign Exchange Dealers Association of India
d) Foreign exchange department in a bank
4 Banks maintain foreign currency accounts known as
accounts with banks abroad.
a) Vostro
b) Nostro
c) Loro
d) FEMA
5 The term `loro account means _____.
a) Our account with you
b) Your account with us
c) Their account with you
d) Local currrent account
6 The foreign exchange market is considered a 24-hour
market because:
a) It is open all through the day

b) All transactions are to be settled within 24 hours

c) At least one market is active at any point of time
due to geographic dispersal
d) A minimum of 24 hours must lapse before any
transaction is settled
7 The major players in the foreign exchange market are:
a) Commercial banks
b) Corporates
c) Exchange of brokers
d) RBI and the central government
8 Speculation in foreign exchange market refers to:
a) Buying and selling of currencies in large volumes
b) Booking of forward contracts without the intention to
execute
c) Buying of selling with a view to make profits from
movements in rates
d) Buying or selling with a view to making riskless profits
9 In direct quotation, the unit kept constant is:
a) The local currency
b) The foreign currency
c) The subsidiary currency
d) None of the above
10Forward margin refers to:
a) The profit on forward contract
b) The commission payable to exchange brokers
c) The difference between spot rate and forward
rate
d) None of the above

11
Exchange Margin is added to:
a) Cross rates
b) Base rate for buying
c) Overseas rates
d)RBI rates

12
The difference between the spot rate and the
forward rate is known as:
a) Forward margin or swap points
b)Marginal difference
c) Bank margin
d)Market margin
13
In direct quotation, a bank buys foreign
currency at ____ price and sells at a ___ price.
a) High, low
b) Low, high
c) Mean, low
d)Average, market
14
Spot rate means settlement:
a) After two working days
b)On the same day
c) After one month
d)Next day
15
When the forward margin is in ascending order
it means that the currency is in:
a) Premium
b)Discount
c) Range-bound
d)Out of range
16 Restricted Money changers can
a)Purchase foreign travellers cheques , currency notes and coins
b)Purchase and sell travellers cheques
c)Deal in foreign exchange transactions of all kinds up to a certain limit
d)Deal only in currencies approved by RBI
17 An Authorised Person under FEMA does not include
a)An Exchange Broker
b) An Offshore Banking Unit

C)An authorised Money changer

d) An authorised dealer
18

A credit in Balance of payments indicates

a)Earning of foreign exchange or incurring liability abroad or decrease in asset
abroad
b)Reduction of bank balance abroad
c)Drain in the foreign exchange of the country
d)Adverse balance of payments

19 Convertibility of a currency is indicated by its

a)Conversion at market rate without any quantitative restriction by government
b)Conversion at official rate
c) Conversion at market rates but subject to quantity restriction by Government
d) Conversion at markets
20 A country has negative balance of trade. It means the balance of payments on
current account
a) May be positive or negative
b) Should also be negative
c) Should be positive
d) Should be the same as balance of trade.
21 FEMA has come into force with effect from
a) June 1, 2000
b) Dec 5,1999
c) May 1, 2000
d) None of the above
22.Rules for conduct of foreign exchange business in India are framed by
a) FEDAI
b) IRDA
c)ISDA
d) SBI
23.Violation of FEMA provisions
a) Is not a criminal offence
b) Is a criminal offence
c) Is an international offence
d)Is a local offence
24.Remittance out of lottery winnings
a)Is a prohibited transaction
b) Is a permitted transaction
c) Is a negotiable transaction
d) Is an authorized transaction
25. Foreign Exchange market is considered 24-hour market because
a)Due to geographic dispersal at least one market is active at any point of time
b) Minimum 24 hours must lapse before any transaction is settled

c)All transactions are to be settled within 24 hours

d) It is open all through the day
26. The net potential gain or loss likely to arise from exchange rate changes is
Exchange risk
Exchange exposure
Profit /loss on foreign exchange
Exchange difference
27. USD 1=63.7525/7550-in this quote by the Bank, 63.7525 indicates Bank`s
a)Buying rate
b)Selling rate
c)Forward rate
d)Tom rate
28.The exchange rates quoted by an Authorized Dealer to its customers are known as
a)Merchant rates
b)Proprietary trading rates
c)Inter-bank rates
d)Market rates
29. The maxim buy low and sell high is applicable for
a. Quotation of pound sterling
b. Indirect rates
c. Direct rates
d)US Dollars

30. In the quotation--Spot

USD 1=Rs. 45.6500/10

500/550

a. Spot dollar is at premium

b. Forward dollar is at premium
c. Forward dollar is at discount
d)Spot dollar is at discount

31.

The settlement of deals in the Money market is governed by:

a) FEDAI
b) FEMA
c) FIMMDA
d) FIRRPRIA

32. FEDAI is constituted under:

a) The Societies Act

b) The Companies Act, 1956
c) The RBI Act
d) The SBI Act
33. Brokers are not expected to ____ in deals.
a) Act as agents
b) Act as principals
c) Act as consultants
d) Act as advisors
34. The origin of exchange control can be traced to:
a) 1930s
b) 1970s
c) 1980s
d) 1990s
35. A transaction which alters the asset or liability position outside India
of a person resident in India ic calledtransaction.
a. Current account
b. Capital account
c. Errors & Omissions account
d. None of the above
36. The number of nostro accounts that can be maintained by a bank in a
particular currency is
a. One
b. Not exceeding three
c. Mimimum two
d. No such limit
37. . Under FEMA, the Reserve Bank of India has been authorised to make..
to carry out the provisions of the Act.
a. Rules
b. Regulations
c. Both rules and regulations
d.Notifications

38. In direct quotation, the unit kept constant is

a. The local currency
b. The foreign currency
c. The subsidiary currency

d. None of the above

39. The acronym FEDAI stands for
a.
b.
c.
d.

Foreign Exchange Dealers association of India.

Federal export dealers association if India
Fixed earners draft
Fixed earners draft agreement on interest

40. The foreign exchange Reserve of our country is expressed

in.currency.
a. Rupees
b. US Dollars
c. Euro
d. SDR
41.For an inward remittance in USD received in the name of a customer the
following rate is applied and the rupee equivalent is credited to his
account.
A)
B)
C)
D)

TT Buying rate
TT Selling rate
Currency Buying rate
Cheque Buying rate

42.The normal transit period prescribed by FEDAI for an export bill payable
on demand is
A)
B)
C)
D)

90 days
25 days
180 days
270 days

43.In financial market, market makers quote both..and ..price

A) Higher and Lower
B) Domestic and Foreign
C) Direct and Indirect
D) Bid and Ask
44.Which among the following is a direct quote?
A) USD 1 = SGD 1.28/30 (New York)
B) Euro 1 = USD 1.35/38 (Hamburg)

C) GBP 1 = INR 82.57/07 (Mumbai)

D) JPY 100 = USD 73/78 (Tokyo)
45.A cheque fro USD 10000 purchased when the exchange rate was USD 1 =
INR 54.00/30. The cheque is returned unpaid. You decide to recover the
amount on a particular day when the exchange rate is USD 1 = INR
55.20/50
A) You will recover Rs.540000 and interest due if any
B) You will recover Rs.552000 and interest due if any
C) You will recover Rs.555000 and interest due if any
D) You will recover Rs.54300 and interest due if any
46.Based on the ongoing market rate you have taken USD 1 = INR 55.40 as
base rate. You load 25/30 for arriving at the TT rates. What is the rate you
apply for issuance of a DD for USD 5000
A) INR 55.15
B) INR 55.65
C) INR 55.70
D) INR 55.10
47.The difference between the TT Buying Rate and TC buying rate represents
A)
B)
C)
D)

Exchange Commission
Spread
Profit Margin
Interest for the transit period

48.A Full Fledged Money Changer comes under the following category
E) AD Category II
F) AD Category I
G) AD Category III
H) AD Category A
49.If interest rate for USD is 4% p.a. and for INR 8% p.a. which currency will be
costlier at a later date
I) US Dollar
J) Indian Rupees
K) Neither USD nor INR
L) Both currencies will be costlier
50. In case the home currency is weakening it is beneficial to .
Exporter
Importer

No one
Banker

B. Foreign Exchange Remittances

1. The terms `current account transactions and `capital

account transactions are used in the context of ______ of a
country.
a) Balance of payments
b) Balance of trade
c) Trade surplus
d) Capital adequacy
2. When a remittance of USD 1000 is sent by you to your
relative abroad for maintenance it is classified as:
a) Current account transaction
b) Capital account transaction
c) General remittance
d) Special remittance
3. For remittance of amount towards imports, this form must
be submitted to the bank:
a) Form A 2
b) Form A 1
c) BTQ form
d) Form R 1
4. For issuing a demand draft, the bank applies ____ rate.
a) Buying
b) Selling
c) Cross
d) Balancing
5. For inward remittances, General Ledger entries at a
banks branch in India are made in:
a) Subsidiary book
b) Mirror account

c) Nominal account
d) Reconciliation account
6. Drawing of Foreign Exchange for the following transaction
is prohibited:
a) Investment in shares overseas
b) Purchase of property
c) Remittance for purchase of lottery tickets,
banned magazines, foot ball pools, sweepstakes.
d) Remittance for giving gifts.
7. Under Foreign Currency contribution Regulation act:
a) A person can open many accounts for receiving the
foreign contribution.
b) No permission need be obtained for opening the
accounts
c) Only single account can be opened and receive
contribution in that account.
d) None of the above
8. Under Liberalised Remittance Scheme, all individuals are
allowed to remit ----- per financial year for any permissible
current or capital account or a combination of both.
a) Usd.100,000
b) USD.75000
c) USD.250,000
d) USD.125,000
9. Capital Account transaction permitted under LRS:
a) Hold shares or debt instruments or any other
assets including property without permission of
RBI.
b) Buy lottery tickets
c) Sweep stakes
d) None of the above

10.
The Acronym SWIFT stands for:
a)Society for world wide international transfer
b) Society for world wide Interbank Financial
Telecommunication
c) Southern world international financial
telecommunication

d) none of the above.

11.
Message type MT1xx used for transmitting
messages in SWIFT is:
a) Customer payments and cheques
b) Treasury markets
c) Securities
d) Collection and cash letters
12.
MT 7xx message type is used in SWIFT for
transmitting :
a) Collection and cash letter message
b) Documentary credit and Guarantees
c) Traveller cheques
d) Cash management and customer status.
13.
SWIFT is:
a) A member owned co-operative
b) Owned by the ICC
c) Owned by world bank
d) All the above
14.
FCRA acronym stands for:
a) Foreign currency regulation act.
b) Foreign currency Reformation act.
c) Foreign contribution Regulation Act.
d) Foreign Contribution Regional Act
15.
Under FCRA Drawing of Exchange for the following
transaction is prohibited:
a) Travel to Nepal and BHUTAN.
b) Payment related to call back services
c) Remittance of interest income on funds held in Nonresident special rupee (Account) scheme.
d) All the above
16.
As per the guidelines of RBI, the Banks must:
a) Need not Obtain the purpose of every inward remittance.
b) Must obtain purpose of every inward remittance.
c) May or may not obtain the purpose of remittance
d) None of the above.
17.
The particulars of inward remittance is to given by:
a) The correspondent Bank in swift message.
b) If it is not given in the message it must be ascertained
c) Can also be obtained from the beneficiary

d) All the above.

18.A document issued by ADs showing receipt of Foreign Inward Remittance
by a resident is
A) BRC
B) CDF
C) FIRC
D) Form-A
E)
19.RTGS arrangement does not ensure the following
A) Immediate transfer of funds
B) Payment instructions are processed and settled transaction by
transaction
C) Compliance of KYC Norms fully
D) Electronic based settlement

20.Mirror revaluation rates are provided by..

A) RBI
B) SEBI
C) DGFT
D)FEDAI
21.SWIFT fulfills the following functions
A)
B)
C)
D)

A method of fast transportation for perishable commodities

A method of quick settlement of trade receivables
Transmission of authentic messages including payments & receipts
Is a loan product that ensures quick release of funds

22.FIMMDA stands for

A) Financial Intermediaries and Money Market Dealers Association
B) Funding Instrument and Money Market Derivatives Association
C) Fixed Income Money Market & Derivatives Association
d)Fund Income Money &Mutual Association

23.As per FEMA the purchase and sale of foreign Exchange can be undertaken
only by
a) Authorised Persons

b) Gove of India Banks

c) State Bank of India
d) Foreign Banks
. 24. FEMA contains
a.
b.
c.
d.

Sections.

49
48
50
27

NON RESIDENT ACCOUNTS:

1. Term deposits can be opened in:

a) NRO account
b)NRE account
c) FCNRB account
d)
All the above
2. A foreign national is of Indian origin if:
a) Both his parents were born in India
b)Both his parents are foreign nationals having
immovable property in India
c) Any one of his parents or grandparents
was an Indian national
d)None of the above
3. Non-resident (external) account can be opened by:
a)
Individuals only
b)Individuals as well as organizations
c) Societies and clubs which do not deal in profitmaking business
d)Individuals and societies which do not deal in
profit-making business
4. A joint account of a non-resident with a resident
accountholder is allowed in:
a) Non-resident (external) accounts

b)Non-resident (ordinary) accounts

c) Non-resident(ordinary) accounts only in the
case of term deposits
d)Foreign currency non-resident deposits
5. An existing account of a resident who goes abroad
for gainful employment and for an uncertain period
will be referred to as:
a) Blocked account
b)Non-resident (ordinary) account
c) Non-resident(external) account
d)Resident account
6. FCNR (B) accounts can be opened for a maximum
period of:
a) Ten years
b)Three years
c)Five years
d)To limit
7. The exchange risk under FCNRB account is borne
by:
a)
The bank maintaining the account
b)The depositor
c) The RBI
d)None, since there is no exchange risk
8. The minimum period for which FCNR (B) account
can be opened is:
a) 46 days
b)90 days
c) Six months
d)
One year

9. An FCNR B account is opened for EUR 50000. On

maturity the deposit is repayable in:
a) Euro only
b)Euro or US dollar only
c)US dollar only
d)
Any currency as desired by the
depositor
10.

The nominee under a non-resident account:

a) Should be a resident Indian
b)
Should be related to the depositor
c)Can be a resident or non-resident
d)Should be an accountholder with the bank

11.Mr.Srinivasan is an NRI working in Dubai. He has let out his house in

Bangalore on a monthly rent of Rs. 25000. He is having an NRE account in your
branch and he wants the rent amount received to be credit to the said account.
You will
A)
B)
C)
D)

You will refuse to credit

You will ask him to open a new account for crediting the amount
This can be credited only to his NRO account
You will accede to his request

12. NRE Account can be opened jointly with:

A)
B)
C)
D)

An NRI only
With resident relative also
Joint Account not permitted
With spouse only

13. Mr. Govind an NRI residing in USA is remitting USD 10000 for credit of his
wifes resident account and this is known as..
A) Capital Transaction
B) Current Account Transaction
C) Official Reserve Transaction

D) FDI
14. A person born in India who opts for a foreign citizenship is called..
A)
B)
C)
D)

NRI
Foreign National
PIO
None of the above

15. This is not one of the features of an NRE account

A) Interest earned in the account is not subject to TDS
B) Funds held in the account is free from wealth tax
C) The account can be held jointly with a resident friend
D) Funds held in the account can be invested in CDs
16. Payment interest in case of following account compounded once in 180 days
basis
A) Recurring Deposit
B) FCNR Deposit
C) EEFC Account
D) RFC(D) Account
17. Remittance received from abroad for credit of NRE account is a..
A) Capital Account Transaction
B) SB Account Transaction
C) Current Account Transaction
D) Official Reserve Account
18. A nonresident having an NRE SB account with you approaches you with a
request to credit Rs. 15000 every month he will be receiving from his earlier
employer in India as pension for his past services. You wil
A) Refuse to credit the amount
B) Will agree and credit the pension amount as requested
C) Credit only if he opens a separate account NRO

D) Take RBI permission

19. The rate of interest payable on the following type of deposit is LIBOR linked
A
B
C
D

NRE Account
FCNR Account
NRO Account
EEFC Account

20. The maximum period for which a FCNR deposit can be accepted is
A 5 Years
B 3 Years
C 10 Years
D I year only
21. RBI has permitted non -residents Indians to open foreign currency account
in India called as
a. FCNR
b. NRO
c. EEFC
D RFC
22.NROaccountstandsfor
A)NonResidentOrdinary
B)NonResidentOccasional
C)NonRemittanceOrdinary
D)NonResidentOrdinal
23. All transactions undertaken by a resident that do not alter his / her
assets or liabilities, including contingent liabilities, outside India are
A) Current account transactions
B) Capital Account transactions
C) Containment transactions
D) Foreign currency exchangeable bonds

24. LRS stands for

a
b
c
d

Liberalised Remittance Scheme

Liberalised regularization scheme
Loro reconciliation statistics
Localised remittance scheme

25. FCNR is always opened as

a) Savings account
b) Current account
c) Deposit account
d) Mutual fund
26. . Which of the following type of accounts can be opened under EEFC accounts
a) FCNR
b) Recurring deposit
c) Savings account
d) Current account
27.

The nominee under a non-resident account:

e) Should be a resident Indian
f) Should be related to the depositor
g)
Can be a resident or non-resident
h)Should be an accountholder with the bank

28. The balance in RFC account can be used:

a) Only for payments outside India
b)Only for payments within India
c)For any purpose including investment
outside India
d)For any purpose other than investment in India
29.An RFC (Domestic) account can be opened by:
a) Resident individuals
b)Any resident, including corporate bodies

c) Foreigner on a temporary visit to India

d)Residents going abroad for temporary visit
30.An RFC (Domestic) account cannot be credited with
foreign exchange in the form of currency notes, bank
notes and travelers cheques acquired as:
a) Business/service earnings/gifts abroad
b)Business/service earnings/gifts in India from a
visitor from abroad
c) Earlier from authorized dealer for travel abroad
and remains unspent
d) Exchange for rupees from a foreign
visitor to India
31.Investment by non-resident Indians on nonrepatriation basis cannot be made in:
a) Nidhis and chit funds
b)Plantation activities
c)Real estate
d) All the above
32.A move towards making rupee fully convertible is:
a) RFC (Domestic) account
b)RFC account
c) FCNR account
d)NRO account
33. Payment of customs duty is:
a) Permissible from EEFC account
b) Not permitted from EEFC
c) After conversion of EEFC balance to INR
d) After getting permission from RBI
34.The RBI Master circular:

a) Permits joint names in EEFC on former or survivor

basis
b) Does not permit joint names in EEFC
c) Permits joint holder as NRI only
d) Permits joint holders on either or survivor basis
35.The EEFC is a source for:
a) NRE deposits
b) CASA deposits
c) NRO deposits
d) RFC (Domestic) deposits
36.Transactions costs are _____ by EEFC accounts.
a) Increased
b) Reduced
c) Multiplied
d) Affected adversely
37. An EEFC account will always be:
a) In USD
b) In INR
c) In any convertible currency
d) In cross currency
e)
38.An ex NRI can park his foreign currency in the following type of account and
can earn interest also
A)
B)
C)
D)

RFC(D)
RFC
EEFC
FCNR

RISK Analysis, Basel Norms, RBI directives on

Risk Management
1 VaR is an estimate of ______ loss for a given period at a
given confidence level.
a Certain

b Potential
c Provisional
d Partial
2 VaR can be calculated for_____ period as desired
a Any
b One month
c Six month
d Long

3 The ___ of the bank decides on the deposit rates.

a Credit department
b Development department
c ALCO
d Accounts department
4 Ideally deposit rates should be ____ the money market
rates.
a At or less than
b More than
c Twice
d Half of
5 A customer tenders a cheque for USD 10000. He requests
the bank to purchase the same. The system fails to take
the transactions into position. This is an example of ______
risk.
a) Market risk
b) Interest rate risk
c) Operational risk
d) Legal risk
6 LCR is an abbreviation for ____.
a) Long term coverage ration
b) Liquidity coverage ratio
c) Low coverage ratio
d) Level coverage ratio

7 The stock of liquid assets should enable the Bank to

survive until Day ___ of the stress scenario.
a) 30
b) 10
c) 15
d) 21
8 Revaluation reserves will form part of _____ capital.
a) Market risk
b) Credit risk
c) Tier I
d) Tier II
9 Perpetual Non-cumulative Preference Shares (PNCPS) is
an element of ____.
a) Credit risk
b) Market risk
c) Tier II Capital
d) Tier I capital
10Failure of which Bank resulted in the formation of Basel
Committee?
a) Daiwa Bank
b) BCCI
c) Sumitomo Bank
d) Bank Herstatt
Introduction to Treasury, Structure of Treasury Front, Mid office and
Back office, Banking and Trading Book, Investment of Domestic
treasury, Ethics and code of conduct of Dealers, Domestic Treasury
Instruments, REPO,

1. Treasury liabilities are created out of ____.

a) Customer deposits

b) Market borrowings
c) Reserve funds
d) Capital funds
2. One objective of the treasury is to fund the banks
balance sheet ____ as possible.
a) As cheaply
b)As quickly
c) As costly
d)As slowly
3. ALCO is an abbreviated from for:
a) Assets and Logistics Committee
b)Approved :Liability Committee
c) Approved Local Committee
d) Asset and Liability Committee
4. FRA is an abbreviated form for:
a) Forward Rate Agreement
b)Fixed Rate Agreement
c) Final Rate Agreement
d)Floating Rate Agreement
5. SLR bonds are classified under:
a) Treasury liabilities
b)Treasury Assets
c) Treasury contra liabilities
d)Treasury
6. The dealing room is the banks ____ with international and
domestic financial markets.
a) Interface
b) Front office
c) Group of dealers
d) Merchant cover

7.Significant authority is given to ____dealers to commit the

bank to the market.
a) Dealers
b) General Manager
c) Reuters
d) Finance Minister
8.Sources such as ____ give market information on a real-time
basis.
a) Reuters
b) Newspapers
c) Dealers
d) Proprietary dealers

9.Conversations in the front office are ___.

a) Recorded
b) Reported
c) Not recorded
d) Not reported
10.KYC in the context of the treasury front office in the dealing
room is an abbreviation for _____.
a) Know Your Counter-Party
b) Know Your Customer
c) Know Your Currency
d) Know Your Conversion Rate
11A banks open currency position in individual currencies is
the main source of ____.
a) Forex risk
b) VaR
c) Hedging strategies
d) Cash flow
12___ portfolio need not be marked To market.
a) HTM
b) AFS
c) HFT

d) VaR
13The middle office of the treasury calculates and prepares
a ____ report.
a) VaR
b) ALCO
c) Risk
d) Cross-currency
14Evolving hedging strategies for assets and liabilities are
done by being part of the ____ meeting.
a) ALCO
b) MMTC
c) STC
d) VaR

15 The mid office recommends enhancement in ____.

a) Stop loss limit
b) Risk
c) Rate scan
d) Cross-currency positions
16For General ledger purposes we use ____ account of
nostro.
a) Vostro
b) Mirror
c) Bank
d) RBI
17A ___ account is necessary to receive and pay foreign
currency funds.
a) Mirror
b) Bank branch
c) Nostro
d) Rate scan
18_____ messages are structured messages.
a) Nostro

b) SWIFT
c) Rate scan
d) CCIL
19Our banks RTGS account with RBI shows ____ balance at
the end of any day.
a) Zero
b) Nostro
c) Vostro
d) Maximum
20CBLO is a product of _____.
a) STP
b) CCIL
c) Forwards
d) FEDAI
21Classification of investment portfolio is necessary for _____
and valuation purposes.
e Internal
f Profit accounting
g External
h Reporting to FEDAI
22All investments in the HTM category will be valued at ____
cost.
e Acquisition
f Translation
g Carrying
h Market
23Investment and trading activities of banks in bonds should
conform to the regulations issued by _____.
e FEMA
f FEDAI
g RBI
h FIMMDA

24HTM should not exceed ____ percent of the investments.

e 25
f 50
g 10
h 20
25The _____ portfolio need not be marked-to-market.
a Non-SLR
b HTM
c Available for Sale
d Trading operations
26Classification of securities is necessary for _____.
i Sorting
j Valuation
k CRR
l SLR

27The HFT category ________.

i Needs to be marked to market
j Need not be marked to market
k Is not market related
l Is not impacted by market
28The AFS category
i Need not be marked to market
j Can be converted to HFT
k Needs to be marked to market
l Can be converted to HTM
29Holding period prescriptions regarding the holding period
applies to ______.
i HFT
j Other than HFT
k Only AFS
l Only to HTM

30Capital adequacy norms of the Basel Committee _______.

e Apply to the Balance Sheet
f Apply to market risk in the Trading book
g Exempt Trading book
h Apply to the assets and liabilities of the bank
1. The placement of money lending in the call/notice money
market is _____.
a) Secured
b) Unsecured
c) Regulated by CCIL
d) Regulate by SBI
2. The CCIL provides the dealing system through ____ a
closed user group to the members of the Negotiated
Dealing System (NDS).
a) INFINET
b) STP
c) SGL
d) WAN
3. The relationship between the price and yield to maturity is
____.
a) Perverse
b) Direct
c) Inverse
d) Cordial
4. Which of the following are the eligible securities in CBLO?
a) Central Government securities including Treasury
Bills
b) CDs
c) CPs
d) NSCs
5. The maximum participation in IBPC can be only ____% of t
percent amount outstanding or the limit sanctioned,
whichever is lower.

a) 30
b) 40
c) 50
d) 75
31A repo transaction includes:
m A spot sale and a forward sale
n A spot sale and a forward purchase
o A spot purchase and a forward purchase
p A forward sale and option purchase
32In the money market, a repo transaction is _____.
m Collateralized guarantee
n Collateralized bid
o Collateralized offer
p Collateralized lending
33Repos are _____ term instruments.
m long
n medium
o short
p very long
34In repo transaction, the lender could be exposed to ____
risk.
m Interest rate
n Exchange rate
o NPA
p Loss asset
35For corporates, repos provide a source of _____.
i Complex borrowing
j Expensive finance
k Inexpensive finance
l Easy finance
36 Identify a statement among the following which is not true ..
A) Risk management is not the functions to be carried out by front office
B) Back office submits statutory return to RBI
C) Deals are concluded by Back office

D) VaR is calculated by Back Office

37 Discount & Finance House of India undertakes
A)
B)
C)
D)

Credit Rating functions

Dispute Resolution
Rediscounting of money market instruments
Promoting trade & investments

38 Return on Investments are known as

A)
B)
C)
D)

Yield
Interest
Dividend
Brokerage

39 This is a form of arbitrage in which the bank exploits anomalies in market

process
B)
C)
D)
E)

Relative Value
Investment
Arbitrage
Swap

40 SLR and CRR are maintained by banks to ensure

A)
B)
C)
D)

Market stabilization
Avoidance of credit Risk
Liquidity
Compliance of RBI regulation

41 Banks buying assets for the purpose of selling on the same day when
prices go up is known as
A)
B)
C)
D)

Arbitrage
Swap
Trading
Dealing

42 Banks can park their surplus funds in the following arrangement

A)
B)
C)
D)

Repo
By issuing its on Capital Bond
Reverse Repo
By issuing CDs

43 The rate of interest offered when extending refinance by RBI to banks is

A)
B)
C)
D)

Base Rate
BPLR
Repo Rate
Bank Rate

44 This is an organization through which Treasury Trade settlements are

undertaken
A)
B)
C)
D)

FEDAI
SEBI
RBI
CCIL

45 The following is not one of the demand liabilities taken into account for
the purpose of calculating CRR
A)
B)
C)
D)

Current Deposit
Overdue FDs
DDs unpaid
RD account where few installments are due

46 Banks are required to maintain CRR in terms of following provisions

A)
B)
C)
D)

Section 24(2A) of B R Act

Section 10 of Negotiable Instrument Act 1882
Section 42 of RBI Act 1934
None of the above

47 The term government securities does not include

A)
B)
C)
D)

Central Government Securities

Certificate of Deposits
State Government Securities
Treasury Bills

48 Certificate of Deposits are issued by banks for a period of

A)
B)
C)
D)

One month to twelve months

I day to 14 days
7 days to One year
1 year to 3 years

49 Which among the following is not true with regard to Commercial Paper
(CPs)
A)
B)
C)
D)

It is unsecured money market instrument

Issued in the form of Bills of Exchange
Primary Dealers are also permitted to issue CPs
CPs may be held by individuals

50 Treasury Bills are issued for the following tenures

A)
B)
C)
D)

7 days to 364 days

For 91 days only
For 14 days, 28 days, 91 days 182 days and 364 days
For one year only

51 The rate of interest will be low in call money market when

A)
B)
C)
D)

Market is liquid
Market is tight
Market is volatile
Market is unstable

52 To ensure that banks do not take risks beyond their risk taking capacity
the following is required to be maintained
A) Margin
B) Collateral
C) Capital Adequacy
D) Guarantee
53 The price differential between different markets of the same asset give
rise to

A)
B)
C)
D)

Speculation
Swap
Arbitrage
Investment

54 This is a type of money market instrument where the borrower has to

repay funds when called upon to do so by the lender.
A)
B)
C)
D)

Notice Money
Call Money
CDs
PCs

55 Interest payable on bond is made known as

A)
B)
C)
D)

Bank Rate
Fixed rate
Coupon Rate
Floating Rate

56 Which among the following is a capital market instrument ?

A)
B)
C)
D)

T-Bills
CDS
Call Money
Equity Shares
57 Find out the incorrect statement among the following

A)
B)
C)
D)

Fixed income securities are also known as Bonds

Money market instruments are settled over the counter
Call Rates are market driven
There are no regulatory limits for call money borrowing and lending

58 A market wherein long-term loans are raised is known as..

A)
B)
C)
D)

Money Market
Stock Market
Forex Market
Capital Market

59 Firms buying Government securities directly from a Government for

reselling to others are...

A)
B)
C)
D)

Brokers
Dealers
Primary Dealers
Ads

60 The interest rate at which banks can avail refinance from RBI is
A)
B)
C)
D)

Base Rate
Prime Rate
Bank Rate
Repo Rate

61 Which among the following statement is true

A)
B)
C)
D)

To enable price discovery, cap on call money interest rate is fixed

Mutual Funds cannot participate in call money operations
Profit making is not one of the objectives of a treasury
Spread between money market asset and liability is a source of profit
of treasury

62 A Demand Draft drawn by Bank of America on SBI, Bangalore for USD

10000 if tendered to you by the payee who is having account in your
branch you will apply the following exchange rate and credit the rupee
equivalent to his account
E)
F)
G)
H)

TT Buying rate
TT Selling rate
No rate will be applied; you send the DD to SBI
Currency buying rate

63 Which of the following function is NOT undertaken by a Front Office ?

A)
B)
C)
D)

Risk Taking
Settlement for the deals concluded
Quoting Exchange Rates
Manage Investment

64 An instrument the tenure of which is less than one year is

A)
B)
C)
D)

Capital Market Instrument.

A Trade Bill of Exchange
A co-acceptance
Money Market Instrument

65 Which among the following is a current liability to the bank ?

A)
B)
C)
D)

Unexpired Fixed Deposit

A housing loan
Credit balance in an overdraft account
A non-performing asset

66 One among the following is not an approved asset which qualifies for
including in SLR
A) Cash held in the branches
B) Investment in stock market securities
C) Cash held in the currency chest maintained by the bank on behalf of
RBI
D) Gold
67 Exchange control authority in India is:
A)
B)
C)
D)

IRDA
ECGC
RBI
FEDAI

68 The liability shown below is not taken into account while computing CRR
E) Recurring Deposit
F) Overdue FDs
G) Refinance obtained from RBI
H) Credit balance in Overdraft Account
69 RBI can increase the SLR requirement not exceeding..of DTL
A)
B)
C)
D)

25%
23%
40%
Cannot increase

70 Identify a statement among the following which is not true

A) Government borrows fund to finance fiscal deficit
B) CRR to be maintained on daily basis is 70% of the total requirement

C) No interest is paid by RBI on CRR balances at present

D) Government securities does not include Treasury Bills
71 The effective cost of SLR is ascertained by
A)
B)
C)
D)

Referring to Bank Rate published by RBI

Repo and reverse Repo rate
Current yield on SLR investments
Current yield minus cost of deposits

72 One of the tools used by RBI for Monetary Control is

A)
B)
C)
D)

Publishing inflation rate

Decontrolling of interest rates
Effecting change in CRR to be maintained by banks
Intensifying audit measures

73 This is an institution set up for arranging guaranteed settlement for trades

concluded by the treasury
A)
B)
C)
D)

SEBI
FEDAI
DFHI
CCIL

74 The acronym CBLO stands for

A)
B)
C)
D)

Clearing and balancing of Liability Operation

Collaterised Borrowing and Lending Operations
Capital Build & Liability Organisation
Central Borrowing & Lending Operations

75 RTGS arrangement does not ensure the following

E) Immediate transfer of funds
F) Payment instructions are processed and settled transaction by
transaction
G) Compliance of KYC Norms fully
H)Electronic based settlement

76 A treasury which undertake both domestic as well as forex operations at

one place is known as

A)
B)
C)
D)

Corporate Treasury
Forex Treasury
Integrated Treasury
None of the above

77 The price ..between different markets for the same asset category
give rise to arbitrage
A)
B)
C)
D)

Ranging
Differential
for future
paid out

78 An export bill for USD 60000 purchased is returned unpaid. Bank will
recover the rupee equivalent calculated by applying the following
exchange rate
A)
B)
C)
D)

Bill Buying Rate

TT Selling Rate
Bill Selling rate
No rate applied; only the rupee amount initially given is recovered with
interest for the overdue period

79 Banks can borrow in call money market not exceeding

A) 125% of their Tier 1 and Tier 2 capital previous year
B) 25% of their Tier 1 and Tier 2 capital previous year
C) 100% of their Tier 1 and Tier 2 capital previous year
D) 50% of their Tier 1 and Tier 2 capital previous year
80 CRR and SLR to be maintained respectively at present are.
E)
F)
G)
H)

25% and 5%
21.5% and 4%
30% and 5%
20% and 3%

81 Identify a statement which is not True

A)
B)
C)
D)

Risk management is not the functions to be carried out by front office

Back office submits statutory return to RBI
Deals are concluded by Back office
VaR is calculated by Back Office

82 Rediscounting of money market instruments are undertaken by

E)
F)
G)
H)

Discount & Finance House of India

FEDAI
SEBI
Delivery versus Payment system

83 Buying a corporate bond yielding 7% and maturing in three years,

financed by deposits costing 6% is the following type of source of profit
of treasury
A)

Investment

E) Spread
F) Arbitrage
G) Relative value
84 This is a form of arbitrage in which the bank exploits anomalies in market
process
F)
G)
H)
I)

Relative Value
Investment
Arbitrage
Swap

85 SLR and CRR are maintained by banks to ensure

I)
J)
K)
L)

Market stabilization
Avoidance of credit Risk
Liquidity
Compliance of RBI regulation

86 Bank buying assets for the purpose of selling on the same day when
prices go up is known as
I)
J)
K)
L)

Arbitrage
Swap
Trading
Dealing

87 Banks can park their surplus funds in the following instrument

E) Repo
F) By issuing its on Capital Bond

G) Reverse Repo
H) By issuing CDs
88 The rate interest offered when extending refinance by RBI to banks is
E)
F)
G)
H)

Base Rate
BPLR
Repo Rate
Bank Rate

89 Two central depositories who maintain stocks in electronic form. They

are..
A) National Stock Exchange and Bombay Stock Exchange
B) SEBI & RBI
C) NSDL & CDSL
D) SHCIL & CCIL
90 One among the statements given below is incorrect with regard to
Certificate of Deposit. Please identify
A) CDs can be issued to individuals
B) While physical CDs are freely transferable, Demat CDs cannot be
transferred
C) Minimum period has to be in excess of 7 days
D) The rate of interest on the CD is payable on simple interest basis.
91 Under Inter-Bank Participation Certificate the maximum participation in
loan would be..
A)
B)
C)
D)

90%
100%
85%
40%

92 Identify a statement which is not true among the following

A)
B)
C)
D)

Generally, the repo rate is lower than that offered on interbank borrowing
Repo is not an instrument available in the money market
Repo provides loan against securities sold on a repurchase agreement
Repo is not allowed in PSU bonds

93 The yield on securities if it is held till redemption is called

A)
B)
C)
D)

Nominal yield
Current yield
Yield to Maturity
Holding period yield

94 Those who buy Government Bonds directly from Government authorities

for the purpose of resale to others are known as..
A) Authorised Dealers
B) Primary Dealers
C) Brokers
D) Agents
95 Which statement among the following is not true with regard to CCIL
operations
A) It takes the responsibility for delivery, making and receiving payments to
and from the counter parties
B) It has introduced a dealing and Trading platform for Forex operations
C) It applies the concept of novation
D) It arrangers unsecured loans to the members
96 Treasury obtains information such as on- going market rate on real time
basis from..
A)
B)
C)
D)

RBI
Head Office
Brokers
Reuters and Bloomberg

97 The exercise of marking open position to market is done for..

A)
B)
C)
D)

As required by RBI
MIS Purpose
Assessing gain or loss
Ascertaining the volume of business transacted

98 Submission of report under MIS system is the function to be carried out

by..
A)
B)
C)
D)

Front office
Mid Office
Back Office
Alco

99 Certificate of Deposit issued by the bank is

A) An asset item
B) A liability item
C) Contingent liability
D) Corporate Trade
100
The following liability is excluded for the purpose of calculating
CRR
A) Overdue FDs
B) RD accounts where monthly installments are in arrears
C) Balance held in current account opened in the name of
concern
D) Paid up capital and reserve

Proprietorship

101
Banks are required to maintain SLR in terms of the following
provisions
E)
F)
G)
H)

Section 42 of RBI Act 1934

Section 24(2A) of Banking Regulation Act 1949
Section 10 of Negotiable Instrument Act 1882
None of the above

102
This is an institution set up to clear trades among market players on
a guaranteed basis
E)
F)
G)
H)

IDA
ICC
SEBI
CCIL

103
E)
F)
G)
H)

To act as a centre of arbitrage and hedging activities

Improve profitability
To ensure decentralization
Efficient utilization of funds

104
E)
F)
G)
H)

The following is not one of the objectives of integrated treasury

An investor who is optimistic about the future market is .

Bearish
Bullish
Piggish
Pessimistic

105

One among the statement shown below is incorrect. Please identify

A Risk management is not the functions to be carried out by front office

B Back office submits statutory return to RBI
C Deals are not concluded by Back office
D VaR is calculated by Mid Office
106
Yield is normally is derived from
A)
A
B
C

Return on Investments
Interest rate differential
Dividend
Brokerage

107
This is a source of income for a treasury earned by exploiting
anomalies in market process
B
C
D
E

Relative Value
Investment
Arbitrage
Swap

108
The primary objective of insisting that banks should maintain SLR
and CRR is to ensure
A
B
C
D

Market stabilization
Avoidance of credit Risk
Liquidity
Compliance of RBI regulation

109
A)
B)
C)
D)

Risk taking is one of the functions to be carried out by

Mid Office
Back office
Front Office
None of the above

115.Money market is market for

Securities of short term nature
Securities of long term nature
Securities made in cash
Exchange of foreign currencies

116.Derivatives are basically..

Financial products for hedging risk
Instruments used for speculation
Negotiable instruments
For lending and borrowing money
117.Which among the following is a treasury asset for the investor?
Certificate of Deposit
Cash with RBI
Fixed assets of the bank
Bills purchased & discounted
118.Treasury front Office handles following functions
Dealing and risk taking
Customer service
Risk Management
MIS, Reconciliation
119.Borrowing by banks in call money should not exceed on an average .%
of banks Tier 1 and 2 capital..
100 %
125%
25%
50%
FORWARD CONTRACTS BOOKING, CANCELLATION, EXTENSION, EXCHANGE
ARITHMETIC

1 OTC derivatives are ____.

a Future products
b Dealt through exchange only
c Customized products
d Non-standard products
2 An option forward contract is also known as _____.
a Exchange product
b Swap
c Future contract
d Option contract

3 Under an option forward contract, the option of choosing

the delivery date within the option period rests with the
_____.
a Customer
b Bank
c RBI
d SEBI
4 Forward contracts must state _____.
a) Only the first date of delivery
b) The first and last dates of delivery
c) Only the month of delivery
d) Only the year of delivery

5. The transaction of booking a forward contract is initiated

by the ____.
a) Broker
b) Exchange
c) Bank
d)
Customer
6.In case of delivery subsequent to automatic cancellation of forward contract
the rate applicable is the ______.
e Originally contracted rate
f Rate on the date of cancellation
g Current rate prevailing on such delivery
h Rate at which cancellation was done
7.One of the charges which arises due to cancellation is ____.
e Fees
f Commitment charge
g Commission on outlay of funds
h Swap loss

8.A forward purchase contract is cancelled by ____ deal with the customer to
mature on the due date of the original contract
e An opposite
f similar
g option

cancelling

9.A forward contract remaining overdue shall on the 15 th day from the date of
maturity be automatically cancelled in terms of rule No. . of FEDAI
a) 7
b) 8
c) 6
d) 5

10. Request for cancellation of forward contract can be made by a customer

a) only after the due date
b) only on the maturity date
c) only a week before maturity date
d) on or before the maturity of the forward contract

11.
Postponement of date of delivery under a forward
contract ____.
i Makes it an overdue contract
j Leads to early cancellation
k Is extension of forward contract
l Is a reversal of the contract
12.
i
j
k
l

Loading of exchange margins is stipulated by ___.

FEMA
RBI
SEBI
FEDAI

13.
On the due date an importer (customer) may seek
extension of ___.
i Forward sale contract
j Forward purchase contract
k Forward contra contract
l Futures contract

14.
When a customer seeks extension of a forward
exchange contract before the due date, it is known as
_____.
a) Early cancellation
b) Early extension
c) Early rollover
d) Early renewal

15. Cancellation and re-booking are the features of _____.

a) Futures contract
b) Spot transaction
c) Tom transaction
d) Extension of forward contract

16.Buying rate for ready merchant rate is derived from _____.

a) Inter-bank spot buying rate
b) Inter-bank ready buying rate
c) Inter-bank spot selling rate
d) Inter-bank ready selling rate
17.An inter-bank quotation is a _______.
a) Two-way quotation
b) Specific rate given
c) Selling rate
d) Buying rate
18.Normal Transit Period is for ____.
a) 20 days
b) 25 days
c) 15 days
d) 7 days

19.The exchange margin is prescribed by the _______.

a) FEDAI
b) Bank
c) FEMA
d) RBI
20.. The term `notional due date refers to _____.
a) The date on
paid
b) The due date
holidays
c) The due date
d) The due date

which an export bill is likely to be

arrived at without considering the
of an import bill
of an overdue bill

21.In foreign exchange transactions the following exchange rate is the best
buying rate for the customer
TT Buying Rate
Bill Buying Rate
Currency Buying Rate
T C Buying Rate
22.When assets purchased for the purpose of selling on the same day when
prices go up is called
Trading
Dealing
Arbitrage
Swap
23.Banks are required to maintain SLR in terms of the following provisions
Section 24(2A) of Banking Regulation Act 1949
Section 42 of RBI Act 1934
Section 10 of Negotiable Instrument Act 1882
None of the above
24.An usance bill of 90 days for Rs.100 is discounted at 12% interest p.a.
Calculate the annualized yield thereon
12.37%
12 %
3%
3.09%
25.CHF Stands for .
Swiss Francs
Chinese Finance
African Rand

Yuan
26. If USD/INR = 62.5000 (Direct Quote) what will be the indirect quote
(INR/USD)?
Rs.100 = USD 1.6000
Rs.100 = USD 1.6200
Rs.100 = USD 1.6250
I USD = INR 62.6500
27. For a lender a Certificate of Deposit issued by other bank is
An Asset item
A liability item
Contingent liability
A security offered
28. Treasury Bills are issued for a maximum period of .
364 days
91 days
182 Days
14 days
29.This is one of the measures initiated by RBI to widen the money market
operations
Setting up of DHFI
Fixing limit for inter-bank transactions
Giving interest on CRR
Restrictions on Treasury operation
30.Which among the following statement is incorrect
RTGS system has been launched by SEBI
More than 90% of the inter-bank transfer are settled through RTGS
RTGS is a system of transferring funds on an immediate basis
Transactions are settled individually without netting debits against credits
Additions:
1. A currency commanding premium against another currency will be ..at
a later date
A)
B)
C)
D)

Costlier
Cheaper
Available at same rate
D)Volatile

2. Following function is carried out by Discount & Finance House of India

I) Credit Rating functions
J) Dispute Resolution
K) Rediscounting of money market instruments
l)Promoting trade & investments

3. This is a form of arbitrage in which the bank exploits anomalies in market

process
J)
K)
L)
M)

Relative Value
Investment
Arbitrage
Swap

4. Treasury buying assets for the purpose of selling on the same day when prices
go up is known as
M) Arbitrage
N) Swap
O) Trading
P)Dealing
22 5. In a Call Option if the strike price is lower than the spot price of underlying
asset you will be..
A) At-the money
B) In-the-money
C) Out-of-the-money
D) None of the above
23 6. IDBI Bank VISA World Currency Card is available in
A)
B)
C)
D)

US Dollar only
Eight foreign currencies
USD and GBP only
Rupees only

24 7. You have opened an FCNR account for USD 100,000 for 3 years at 3 %
interest per annum; After 6 months you are requested to close the deposit
before maturity. You will
A)
B)
C)
D)

Pay interest applicable for six month without penal cut

Pay 2% simple interest
Pay at LIBOR for six months
Not pay any interest

25 8. This is a self-regulatory body

A)
B)
C)
D)

SEBI
CCIL
FEDAI
ECGC

26 9. Record of corresponding entries in respect of transactions taking place in

the Nostro accounts are maintained by the bank in ..
A)
B)
C)
D)

Escrow Account
Vostro Account
Mirror Account
Current Account

27 10. For the purpose of showing the rupee equivalent of the FCNR deposit
accepted by the bank the following rate is applied
A) Buying Rate
B) Selling Rate
C) Notional Rate
D) No Rate
28 11. A derivative product which gives the buyer the right, but no obligation is
called..
A) Futures
B) Options
C) Forwards
Swap
29 In case of an export bill drawn under LC where simultaneous reimbursement
is available from a bank abroad the NTP stipulated by FEDAI for such
transactions is..

A) 5 days
B) 7 days
C) 25 days
D) 20 days
30 The maximum amount that can be released in currency notes to a resident
going to Dubai on a private visit is
A) USD 10000 or its equivalent
B) USD 3000 or its equivalent
C) USD 5000 or its equivalent
D) No limit
32. Identify among the following an indirect quote
A) INR 100 = SGD 2.50/55 (Singapore)
B) GBP1 = USD 1.70/75 (New York)
C) EUR 1 = USD 1.30/35 (Frankfurt)
D) USD 1 = JPY 70/75 (Tokyo)
33. Which among the following comes under market risk

A)
B)
C)
D)

Buyer becoming bankrupt

Fall in stock market price
Government banning imports
Goods lost in transit

34 The main objective of capital adequacy norm is to ensure the following..

A) Banks should not lend unscrupulous borrowers
B) To curtail unhealthy competition amongst bankers
C) To prevent banks from taking risks beyond their risk taking
capacity
D) To enable more players to commence banking business
35.The difference between a cheque buying rate and TC buying rate
represents...
E)
F)
G)
H)

Interest for the transit period

Spread between buying and selling rate
Forward premium
Swap point

36. Funds would be easily available when.

A)
B)
C)
D)

Money market conditions are tight

Market is highly liquid
Market is flat
There is no competition

37. One country depending on another country what they require will lead to .....
E)
F)
G)
H)

Competition
Monopoly
International Trade
Inflation

38.Deal slip verification is done by

P) Front Office
Q) Mid office
R) Back office
S) Head office
39. Which of the following function is NOT undertaken by a Front Office ?
E)
F)
G)
H)

Risk Taking
Monitoring exposure limits
Quoting Exchange Rates
Manage Investment

40. An instrument the tenure of which is one year and above

E)
F)
G)
H)

Capital Market Instrument.

A Trade Bill of Exchange
A co-acceptance
Money Market Instrument

41. The detailed record of all economic transactions between a country and the
rest of the world is called
I) Balance of Payments
J) Balance of Trade
K) National Income
L) Gross National Product
42. Which among the following is a current liability to the bank for the purpose of
NTDL?
E) SB account overdrawn
F) Interbank borrowing
G) Credit balance in an overdraft account
H) Borrowal through Repo
43. An NRE account holder wants you to credit rent received from a house in
India to his NRE SB account. You will
A) Refuse to do so
B) Take RBI permission
C) Can be credited only to his NRO account
D) Credit as requested if he does not have NRO account
44. India Remit is an arrangement shown below;
A) Mode of transferring funds for those based in UK
B) Transferring funds to India from anywhere in the world
C) Funds transfer arrangement from Middle East
D) Funds transfer from far eastern countries
45. For a person going to USA for business promotion the maximum amount of
foreign currency notes that can be released is
A) USD 25000 or its equivalent
B) USD 3000 or its equivalent
C) USD 10000 or its equivalent
D) USD 5000 or its equivalent
46. An export bill in foreign currency purchased by you r bank is remaining
unpaid and you want the foreign currency liability of the customer to be
converted into Indian Rupees to avoid fluctuation in exchange rate. This exercise
is called

E) Forward booking
F) Crystallization
G) Recovery of advance
H) Rupee export credit

47. In case a forward contract is not utilized by the customer within .days
bank will cancel such contract on their own.
A) 15 days
B) 30 days
C) 7 days
D) 10 days
48.Payment interest in case of following account compounded once in 180
days basis
E) Recurring Deposit
F) FCNR Deposit
G) EEFC Account
H) RFC(D) Account
49. To ensure that small gifts and pleasantries do not become bribery it is
necessary to have..
A) Total restriction on such thins
B) Well documented policy for such practices
C) Strict vigilance
d)Periodical review
50. Interest earned on the following type Non Resident Account is subject to TDS
A) Non Resident External account
B) Non Resident Resident account
C) Non Resident Ordinary Account
D) Foreign Currency Non Resident account

51. CRAR stands for..

A) Cash Reserve Account Ratio
B) Capital to Riskweighted Asset Ratio
C) Current Ratio And Returns
D) Capital Risk And Return
52. In a forward contact the maximum period available for exercising the option
is ..
A) 6 months
B) 7 days
C) One month
D) 10 days
53. Under Basel Norms the minimum percentage of capital expected to be
maintained against risk weighted assets is..
A) 9%
B) 12%
C) 8%
D) 10%
54. NRE fixed deposit are accepted for a minimum period of ...... and for
maximum period of .years
A) 7 days and 10 years
B) One year and 10 years
C) One year and 5 years
D) 15 days and one year
55. One of the following is not the objectives of integrated treasury is.
A)
B)
C)
D)

Improved profits
Minimize Risk
Maximum utilization of man power
Transfer pricing

56. One of the reasons why one country depends on another for goods that they
require is..
M)
N)
O)
P)

To promote international trade

To increase demand for foreign goods
Profit Margin
Non availability of such goods in their country

57. In case of discount the forward margin is to arrive at the forward

rate to the sport rate
L) Added
M) Deducted
N) Multiplied
O) Dividend
58. On an investment of Rs.100 for one year payment of interest at 8% is
upfront. This means the investor has to pay for getting that security.
A)

Rs.92.00

H) Rs.108.00
I) Rs.8.69
J) Rs.91.31

59. Which among the following liability is excluded from NTDL for the purpose of
calculating CRR/SLR

E) Overdue FDs
F) RD accounts where monthly installments are in arrears
G) Balance held in current account opened in the name of
concern

Proprietorship

H)Paid up capital and reserve

60. Which among the following is not one of the objectives of integrated treasury

I)
J)
K)
L)

To act as a centre of arbitrage and hedging activities

Improve profitability
To ensure decentralization
Efficient utilization of funds

61. Penalty charged by the transport company for not lifting the goods after
reaching the destination is called
I) Pilferage
J) Duties
K) Demurrage
L) Additional Freight
62. Submission of report under MIS system is the function to be carried out by..
E) Front office
F) Mid Office
G) Back Office
H) Alco
63. Comparing the market rate periodically of the assets held by banks is known
as....
E) Devaluation
F) Revaluation
G) Marking to market
H)Profit booking
64. A swap deal in forex market refers to
A)
B)
C)
D)

The same as interest rate swap

Exchange of one foreign currency loan for another
Simultaneous buying and selling of one currency for another
A sale of foreign currency to be delivered at alter date

65. An arrangement where the importer in India is paying for the goods imported
at a later for the goods imported by him is called.
A)
B)
C)
D)

Trade Credit
Suppliers credit
Buyers credit
Back to back credit

66. Bank of America Frankfurt has opened a LC favouring Pal Exports India
payable at sight basis.LC contains a clause saying that negotiating bank to claim
reimbursement directly from Bank of America in New York by Swift. What is the
NTP prescribed by FEDAI in such case?
A) 25 days
B) 30 days
C) 15 days.

D) 5 days
67. Acronym MTCN stands for..
A) Margin Trading & Credit Notion
B) Money Transfer Control Number
C) Main Traders Credit Note
D) Maintenance and Transfer Code Number
68. A contract which gives the holder the right, but not the obligation to buy or
sell specified quantity of the underlying assets is known as..
A)
B)
C)
D)

Future
Option
Forward
Swap

69. Interest on FCNR deposit is calculated based on the LIBOR rate prevailing on
..
E)
F)
G)
H)

Last Friday of the previous month

Last banking date of the previous month
Last date of the previous year
Preceding Friday.

70.IDBI has its own branch abroad in....

E)
F)
G)
H)

London
New York
Hong Kong
Dubai

71. India is facing continuous deficit in its balance of payments. In the foreign
exchange market rupee is expected to
E) Depreciate
F) Appreciate
G) Remain stable
H) Remain volatile
72. Interest in money market in USA is 4%; In India it is 6%. In the foreign
exchange market.
A)
B)
C)
D)

Dollar will be quoted at discount of 2% p.a.

Rupee will appreciate by 2% p.a.
Dollar will be quoted at a premium of 2% p.a.
Money market has no effect on foreign exchange market

73. GDR & ADR Stand for

A) Global Depository Receipts & American Depository Receipt
B) German Democratic Republic & American Democratic Republic
C) Government Department of Revenue & Allied Department of Revenue
D) Global Developmental Review & American Developmental Review
74. The proprietor of Galaxy Traders, Mr. Namdev wants to visit Srilanka for two
days for Business Development purpose. You can release foreign exchange to
him upto.
A) USD 10000 or its equivalent
B) USD 30000 or its equivalent
C) USD 25000 or its equivalent
D) USD 1000000 or its equivalent
75.In a letter of credit issued by Bank of America New York k in Indian Rupees,
the negotiating bank has been authorized to claim reimbursement form SBI
Bangalore. If documents are negotiated by IDBI Bank, K H Road branch
Bangalore what the NTP fixed by FEDAI for such transaction..
A) 5 days
B) 3 days
C) 1 day
D) O day

76. The probability of the price of an investment decreasing is falling under

A)
B)
C)
D)

Country Risk
Credit Risk
Market Risk
Operational Risk

77. . In Indirect quotation, the unit kept constant is:

A) the local currency

B) the foreign currency

C) the subsidiary currency
D) both the currencies

78. . In Indirect quotation, a bank buys foreign currency at ____ price and sells at
a ___ price.
A) High, low
B) Low, high
C) Mean, low
D) Average, market
79. Call money borrowing is subject to
A) A minimum of Rs. 1 lakh
B) Maximum of 100% of Banks Tier I and II capital
C) 25% of Aggregate Deposit
D) 50% of NDTL

80. Securities having tenor of one year and above is ...

A) Money Market Instrument
B) Dated securities
C) T Bills
D) Commercial paper
81. Over bought position means.
A) Purchases are more than sales
B)Sales are more than purchases
C)Purchase and Sales are equal

D)Purchases made in anticipation of sales

82. Bank rate announced by RBI is applied for the following types of transactions
A)Rediscounting of bills by RBI which are discounted by banks
B)Borrowing through Repo.
C)Lending through Reverse Repo
D)Marginal Standing facility

83. A corporate would be eligible to issue CP provided

A)The net worth of the company is not less than Rs.4 Crores
B)Corporate has not availed any bank loan
C)Loan availed is not a standard asset
D)Participant is a PSU
84. . This is one of the measures initiated by RBI to widen the money market
operations
A)Fixing limit for inter-bank transactions
B) Setting up of DHFI
C)Giving interest on CRR
D)Restrictions on Treasury operation

85. The term `notional due date refers to _____.

A) The due date of an overdue bill
B)The date on which an export bill is likely to be paid
C)The due date arrived at without considering the holidays
D) The due date of an import bill
86. 9.85% GOI 2015 securities with an Yield of 8.70% was Bought at Rs.118.50.
Whcn the Yield falls to 8.25% what will happen to the price of the Bond?
A) Bond Price Falls
B) Bond Price does not Change

C) Bond Price rises

D) Bond price is insensitive to Yield

87. The Main drivers for transformation of trreasuries from mere SLR,CRR
keepers into Profit Centres------A) Spurt in Volumes
B) Volatility of Interest Rates
C) Regulatory Fiat
D)Sudden increase in the expertise of the Treasury Personnel
88. The following are a few derivatives which are also treasury products:
A) Tier II Bonds issued by the Bank
B) Floating Rate Bonds
C) External Commercial Borrowings
D) IRS, Swaps, Futures and Options
89. What is Unethical when the Dealers handle confidential information-------A) Not revealing the information to any body
B) Destroying the information
C) Using the information for competitive advantage knowing
that is was privileged
D) Keeping and storing the information with themselves.

90. The middle office of the treasury calculates and prepares a ____ report.
A)VaR
B)ALCO
C)Risk
D)Cross-currency
91. An FCNR B account is opened for EUR 50000. On maturity the deposit is
repayable in:
A)Euro only
B)Euro or US dollar only

C)US dollar only

D)Any currency as desired by the depositor

92. The Banks Balance Sheet is funded not only by Deposits but also by-----A) Assistance of Head Office
B) Help from RBI
C) Contribution from peer banks
D) Market Borrowings

93.VAR 99% confidence level implies:

A) 99% probability of the stated loss
B) 1% probability of the stated loss
C) 99/2% probability of the stated loss
D) cannot be calculated