<<12345678910111213141516171819202122232425>> 1. What does the term "value date" refer to in foreign exchange transactions?The date of transaction initiationThe date when funds become effective and subjected to interestThe date of currency deliveryThe date of currency exchange rate determinationQuestion 1 of 25 2. What does arbitrage in foreign exchange involve?Buying and selling commodities in two different marketsBuying and selling currency in one centerBuying and selling currency in multiple markets to exploit temporary price differencesBuying and selling currency with a delay to maximize profitsQuestion 2 of 25 3. What is the cardinal principle of operational procedure in dealing room operations?Compliance with FEDAI regulationsSegregation of activities into Front Office, Mid Office, and Back OfficeFollowing internal guidelines of the bankEnsuring complete trust within the dealing roomQuestion 3 of 25 4. What is the main responsibility of a dealer in the foreign exchange dealing room?Managing NOSTRO accountsEnsuring compliance with internal control guidelinesMaintaining both funds and currency positionsImplementing FEDAI regulationsQuestion 4 of 25 5. What is one of the functions of an Integrated Treasury related to risk management?Developing derivative productsMeeting CRR and SLR requirementsPricing assets and liabilitiesAnalyzing major cash flowsQuestion 5 of 25 6. Which function of an Integrated Treasury involves simultaneous buying and selling of assets in different markets?Liquidity and funds managementTransfer pricingArbitrageCapital adequacyQuestion 6 of 25 7. What is one of the objectives of using derivative instruments?Maximizing corporate cash flowsMinimizing corporate debtSpeculating for short-term profitsReducing risks associated with cash flow managementQuestion 7 of 25 8. What is a Foreign Currency Futures Contract?A contract to buy or sell foreign exchange at a fixed time and place in the future, traded on an exchange.A contract to buy or sell foreign currency at the current market price, agreed upon today.An agreement between two parties to exchange foreign currency at a variable rate in the future.A contract to buy or sell foreign currency on the spot market.Question 8 of 25 9. What is a Forward Contract?A standardized contract traded on an organized exchange for future delivery of foreign currency.A tailor-made agreement between two parties to fix the exchange rate for a foreign currency in advance.An agreement between two parties to exchange foreign currency at the current market rate.A contract for immediate delivery of foreign currency on the spot market.Question 9 of 25 10. Which statement about options is correct?The premium is the exchange rate at which the option can be purchased or sold.An American Option can only be exercised on its expiration date, not before.The buyer of a call option has the right to sell the currency.Volatility is not a factor considered in pricing options.Question 10 of 25 11. Which statement correctly defines "In the Money" options?An option whose exercise price is the same as the spot price of the underlying currency.An option that would not be profitable if exercised immediately.An option that would be profitable if exercised immediately.An option that is not related to the spot price of the underlying currency.Question 11 of 25 12. Which option correctly describes "Out of the Money" options?An option whose exercise price is the same as the spot price of the underlying currency.An option that would not be profitable if exercised immediately.An option that would be profitable if exercised immediately.An option that is not related to the spot price of the underlying currency.Question 12 of 25 13. What is the characteristic of "At the Money" options?The option would be profitable if exercised immediately.The option's exercise price is different from the spot price of the underlying currency.The option's exercise price is the same as the spot price of the underlying currency.The option is not related to the current market conditions.Question 13 of 25 14. What is the primary purpose of a currency swap?To exchange a series of cash flows based on fixed interest rates.To hedge forex risk as well as interest rate risk simultaneously.To exchange future cash flows between two parties.To diversify income for a specified period of time.Question 14 of 25 15. What type of swap involves regular exchange of cash flows based on different floating rates?Interest Rate SwapCurrency SwapZero Coupon SwapBasis SwapQuestion 15 of 25 16. How can a corporation mitigate coupon risk associated with yearly interest payments?By entering into Principal Only Swaps (POS).By hedging interest amounts through Coupon Only Swaps (COS).By receiving the floating rate through Interest Rate Swaps (IRS).By exchanging cash flows between two parties.Question 16 of 25 17. Which type of institution is categorized as an Authorized Dealer - Category III?Commercial banksState and Urban Cooperative BanksExim BankUpgraded FFMCsQuestion 17 of 25 18. What is the primary role of Full Fledged Money Changers (FFMCs)?To handle all current and capital account transactions.To deal with forex transactions incidental to financing of international trade.To purchase and sell foreign exchange for private and business visits abroad.To undertake non-trade nature foreign exchange transactions.Question 18 of 25 19. What is the objective behind RBI's guidelines regarding foreign exchange operations?To facilitate unrestricted foreign exchange transactions.To regulate and discipline market operations in foreign exchange.To encourage speculative trading in foreign currencies.To minimize the profitability of entities dealing in foreign exchange.Question 19 of 25 20. Which of the following is NOT a role of FEDAI?Issuing guidelines on various aspects relating to Foreign Exchange.Articulating India's viewpoint in various revisions in the ground rules.Providing training to member banks on Foreign Exchange matters.Regulating the activities of public dealing in foreign exchange.Question 20 of 25 21. FEDAI is primarily associated with:Promoting growth of India's external sector.Administering India's International Trade.Regulating the activities of Forex Brokers.Setting interest rates for foreign exchange transactions.Question 21 of 25 22. What is the main objective of FEDAI's accreditation to intermediaries?To regulate the activities of intermediaries in the forex market.To monitor the broking activities in the Inter-Bank Forex market.To ensure compliance with FEDAI guidelines by intermediaries.To facilitate training of intermediaries in foreign exchange matters.Question 22 of 25 23. Which of the following is NOT an objective of the FX Global Code?Principles of good practices.Engaging local participants actively.Promoting healthy & disciplined dealing room trading.Establishing uniform guidelines for local currency exchange rates.Question 23 of 25 24. Under RBI guidelines, which type of borrowing in NOSTRO accounts is subject to a specific ceiling?Loans to resident constituents for foreign exchange needs.Temporary overdrafts not adjusted within five days.Borrowings for extending export credit in foreign currency.ECB borrowings for general operational purposes.Question 24 of 25 25. According to RBI guidelines, which entity can book forward contracts up to a limit of USD 100,000?Small and Medium Enterprises (SMEs).Importer and exporter customers.Resident individuals banking with the respective bank.Authorized Dealer Category I banks.Question 25 of 25 Loading...
