Interest Rate Derivatives Quiz2

A trader does the following currency futures trade – sells EURINR and Buy JPYINR for an equivalent amount. What view has he executed ?

A trader takes a long position in USDINR futures contract at a price of 65 by buying 40 lots. On expiry of contract the settlement price was 65.40. What is his profit or loss ?

Mr. Amit sells a USD put option at strike of 66 and receives a premium of INR 0.4. What would be the break even point for the two transactions ?

The current EURIN spot is 80. The current future price of EUR is at a premium to INR. A trader believes that on expiry of one month EURINR futures, the spot may remain at 80. What currency futures trade strategy would be profitable to the trader if his views comes correct?

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 ?

___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.

An Indian investor has invested Rs 390000 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 Rs 62. What would be his real returns( returns in INR terms) ?

___best describes the total open interest which is used for the purpose of monitoring open position during the day.

An vegetable oil factory owner gets into a contract with McDonalds to sell certain quantity of vegetable of contract has the factory owner entered into with the McDonalds ?
oil at a fixed price for a year. Which type of Contract has the factory owner entered into with the McDonalds?

Mr. Amit is working with a of a currency broking house is an expert in currency movements. As per his view, INR should appreciate against EUR in next 6 months and accordingly he advised some of his clients to take a short position by selling EUR against INR and also he guaranteed against any losses. The manager of the employee takes an action against Mr. Amit for violating some trading guidelines. What should Mr. Amit have done to avoid the punishment ?

Mr. Vaibhav believes that USDINR will appreciate and accordingly he enters into a derivative contract to execute his view of appreciating USDINR.
His view proved correct but he observed that his profits are not increasing along with the USDINR appreciation. What type of derivative contract would he have entered in ?

What is true with respect to Governing Council of currency futures segment of an exchange ?

A ‘DERIVATIVE PRODUCT can be best described as a___

If a person has bearish view on USDINR, which would be the appropriate strategy for the objective of maximizing the profit ?

Identify the appropriate strategy for a BULLISH view on USDINR and trade objective of zero cash outgo.

As a trader you believe USDJPY will move from 90 to 95 in the next one month. You are a trader based in India where there is no trading in USDJPY. Therefore which of the following would you do to execute this view using currency future contracts of JPYINR and USDINR.

If more than one contract in a series are outstanding at the time of expiry/ squaring off, the contract price of the contract so squared off should be determined using____method for calculating profit/loss on squaring-up.

Which of the below option is TRUE with respect to Exchange Traded derivatives ?

When you buy an Option, does it means you have a right to sell the underlying asset ?

The minimum networth required for a company for applying to become a authorised exchange of currency futures is Rs _Crores

A sub-broker has to execute a bipartite agreement between him and his client clearly specifying rights and obligations of each party – State True or False ?

For the same maturity, the premium on “In The Money’ option will be lower than the premium for ‘Out of The Money’ option – State True or False ?

A wheat flour manufacturer gets into a contract with a five star hotel chain to sell certain quantity of wheat flour at a fixed price for a year.
However after a few months, the price of wheat rises much above the contracted price and the manufacturer refuses to sell to the five star hotel chain. What is the type of risk highlighted in this contract?

An Indian exporter wishes to completely hedge the 10,000 GBP he is expecting to receive on 70th day from today. On the exchange the contracts available are for 30,60 and 90 maturity days. He does not want to take any risk. What kind of action is he likely to take ?

As per SEBI rules, the Exchange has to offer how many minimum number of ‘OUT OF THE MONEY durrency option contracts for each maturity ?

Mr X buys GBPINR futures at various price points over two days. He buys 20 lots at 80.00 at 11.30 am and 15 lots at 80.25 at 1.30 pm on Day 1. On Day 2 he buys 25 lots at 80.50 at 11 am and 10 lots at 80.40 at 2 pm. On day 3 he sell 50 lots at 80.60. Calculate his Profit / loss on the squared off position using FIFO method.

A trader feels that INR should depreciate against the USD in the next few months. What currency future transaction will be profitable to him if his view comes true ? (Assume everything else remaining the same )

A trader wants to sell GBPINR one month futures contract. The current price is 81.50 and he enters a limit order to sell at 81.70. Assume that the price moves between 81 and 82 after the limit order was entered, at what price is this order likely to be executed ?

In Currency Market, if’T is the date of transaction, the T + 1 is called as (With respect to Settlements)

When you short a PUT option, once the breakeven point is crossed, the losses keep increasing with decreasing price of underlying asset.

Only American style currency options are traded on exchanges – State True or False ?

The mark-to-market gains and losses are settled in cash before the start of trading on _day

The tick size for USDINR futures contract in India is___

A client buys a EUR Put option at strike of 60 and pays a premium of INR 0.45. What would be the breakeven point for the transaction?

A trader in currency markets buys a long position in EURINR futures contract at a price of 65.40 and he buys 40 lots of the same. On expiry the settlement price is announced at 65.60. How much profit (+) or loss (-) does he make ?

As per the Foreign Exchange Management Act an ‘AD Category 1’ bank can have a maximum net NPA of___ % to become a Trading and Clearing Member of currency futures segment at a recognised stock exchange.

A trader is long in EURINR Call option of strike price of 75. The current spot price of EURINR is 79. What is the moneyness of this option ?

Assume that on 1st December 2010, USD-INR spot was at 45, premium for January 2011 maturity put option at strike of 45.5 is INR 0.54/0.55 and premium for January 2011 maturity call option at strike of 45 is INR 0.71/0.72. A client Mr. Shah executes a trade wherein he buys put at a strike of 45.5 and sells a call at a strike of 45. On expiry the RBI reference rate is 44.75. How much net profit/loss did Mr. Shah make per USD?

As per SEBI rules, the currency exchanges have to offer_ series monthly contracts and contract.

A person sells a USD Put option at strike of 60.50 and receives a premium of INR 0.40. What would be the breakeven point for the transaction?

What is the ISO Currency Symbol of SWISS FRANC?

The minimum net worth for a company to be eligible for applying to become an authorized exchange for currency futures is Rs___

The intrinsic value of ‘In the money’ option and ‘At the money’ option is always greater then or equal to One – State whether True or False?

Broker Mr. A charges a brokerage of Rs 20 per lot of USDINR futures on only one leg of the transaction if its squared off the same day. Broker Mr B charges Rs 15 per lot of USDINR futures on both the legs even if its squared up on the same day. A client buys 15 lots of USDINR futures and sells of 10 lots the same day and the balance 5 lots after 4 days. What will be the brokerage charged by broker Mr A and Mr B respectively?

Which of the following is true with respect to settlement date for exchange traded currency futures ?

The initial deposit which is required for initiating a currency future position is known as

Which of the following best describes the guidelines for brokers with respect to issuing of contract notes for execution of orders?

In OTC currency derivative market in India, is it possible for a corporate to write an option and receive a net premium?

Which of the following correctly describes the closing price of USDINR futures contract ?

The system of accounting which is used to calculate prices of currency futures contract when multiple contracts of a series are combined / squared up is___

The system of accounting which is used to calculate prices of currency futures contract when multiple contracts of a series are combined / squared up is___