NISM SERIES I CURRENCY DERIVATIVES MOCK TEST DEMO
Explanation: In JPYINR, JPY is the Base Currency and INR is the Quoted Currency. The first mentioned currency is always the Base currency.
Explanation: Every derivative contract should have an underlying be it Stocks, Commodities, Currencies etc. Without an underlying there there can be no derivative.
Explanation: India has an interest rate higher than UK, so as per the concept of Interest Rate Parity, the GBPINR Future price will always be at a premium to Spot prices. If the interst rate gap widens, so will the spot price-future price gap. For eg - price of future GBPINR pair is 72 when spot price is 70. It means that INR is at discount to GBP and GBP is at premium to INR.
Explanation: USDINR contract lot is 1000. He has bought two lots for a cost of Rs 104000 So 104000 / 2 = 52000 and 52000 / 1000 = 52 Buying Price Settlement Price is 52.30. 52.30 - 52 = 0.30 profit x 2 lots x 1000 lot size = Rs 600 profit
Explanation: The first ever financial future was Currency (FX) future.
Explanation: For a long Call Option : Strike Price plus the premium paid is the breakeven point 57.50 + 0.60 = 58.10
Explanation: Mr. Shah has to send USD after two months, so to safegaurd against fluctuations, he will buy USD futures. The lot size for each USDINR future contract is USD 1000. So by buying 10 contracts he is hedgeing his future receipts of USD 10,000. The lot size for EURINR it is EUR 1000; GBPINR it is GBP 1000 and in case of JPYINR it is JPY 100,000.
Explanation: Options contracts having the following expiries shall be available for trading on USDINR. On the expiry of a near month contract, new contracts shall be made available so that at any point in time there shall be at least four expiries available for trading. For eg : Sr. No. Expiry Date Maturity Date Remarks 1 26 NOV 2010 26 NOV 2010 Monthly Contract 2 29 DEC 2010 29 DEC 2010 Monthly Contract 3 27 JAN 2011 27 JAN 2011 Monthly Contract 4 29 MAR 2011 29 MAR 2011 Quarterly Contract
Explanation: Eg - If USDINR is 55 and Rupee begins to depreciate, then USDINR will move up from 55 to ... 56 and so on. So if a trader is expecting INR to depreciate, he will buy USDINR at 55 and profit fom the upward move.
Explanation: There are no daily price bands applicable for currency futures contracts. However in order to prevent erroneous order entry by members, operating ranges will be kept at +/-3% of the base price for contracts with tenure upto 6 months and +/-5% for contracts with tenure greater than 6 months.
Explanation: Settlement Date is the Last working day of the month (subject to holiday calendars) at 12 noon. (Last trading day or Expiry day - 12 noon on the day that is two working days prior to the settlement date)
Explanation: The main data is the buying and selling prices. He bought at 30 paise and sold at 18 paise. So net loss of 12 paise ( 30 -18 ) (-).12 X 100 lots x 1000 lot size = -12,000
Explanation: The currency futures segment of the Exchange has a separate Governing Council on which the representation of Trading /Clearing Members of the currency futures segment does not exceed 25 %
Explanation: One reason for the depreciation of a currency is the outflow of foreign capital / currency. So if the outflow can be reduced and inflow increased, the depreciation of the currency will get reduced. Therefore by allowing more Foreign Institutional Investors ( FII ) to invest more money will help increase inflows and reduce the local currency depreciation.
Explanation: When the spot price increase, the Value / Premium of Call Option will always rise.
Explanation: The breakeven point for a short put is the strike price of the option minus the premium. So 60.50 - 0.40 = 60.10
Explanation: Arbitrageurs make profits by simultaneously entering opposite side transactions in two or more markets ie. buy in one market at a lower price and sell in another at a higher price. Here, in the OTC Market the Bid Ask price is 68.75 / 68.90. So an arbitrageur will buy at 68.90. In Futures Market the Bid Ask price is 69.30 / 69.60. So the arbitrageur will sell at 69.30. Thus he will make an arbitrage profit of Rs 0.40 ( 69.30 - 68.90 )
Explanation: Buying a Call is the best option as he is anticipating a strong bullish run in USDINR. Decrease in volatility will be an added advantage as he will get the call cheaper.
Explanation: V.IMP Note - Please memorise the open position limits which have been prescribed by SEBI for different currency pairs and different market participants from the NISM Nov 2014 book
Explanation: When a client defaults in making payments in respect of a daily settlement mark to market margins, the contract is closed out. The amount not paid by the client is adjusted against the initial margin.
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