Professional Documents
Culture Documents
Exchange Market,
3.Exchange Rates and Types 4.FEMA, FEDAI, FIMMDA
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
31.
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
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
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
23.As per FEMA the purchase and sale of foreign Exchange can be undertaken
only by
a) Authorised Persons
Sections.
49
48
50
27
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
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
RFC(D)
RFC
EEFC
FCNR
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
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
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
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
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
Yield
Interest
Dividend
Brokerage
Relative Value
Investment
Arbitrage
Swap
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
A)
B)
C)
D)
Repo
By issuing its on Capital Bond
Reverse Repo
By issuing CDs
Base Rate
BPLR
Repo Rate
Bank Rate
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
49 Which among the following is not true with regard to Commercial Paper
(CPs)
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
Notice Money
Call Money
CDs
PCs
Bank Rate
Fixed rate
Coupon Rate
Floating Rate
T-Bills
CDS
Call Money
Equity Shares
57 Find out the incorrect statement among the following
A)
B)
C)
D)
Money Market
Stock Market
Forex Market
Capital Market
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
TT Buying rate
TT Selling rate
No rate will be applied; you send the DD to SBI
Currency buying rate
Risk Taking
Settlement for the deals concluded
Quoting Exchange Rates
Manage Investment
A)
B)
C)
D)
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
SEBI
FEDAI
DFHI
CCIL
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)
25% and 5%
21.5% and 4%
30% and 5%
20% and 3%
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
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
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
90%
100%
85%
40%
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
A)
B)
C)
D)
Nominal yield
Current yield
Yield to Maturity
Holding period yield
RBI
Head Office
Brokers
Reuters and Bloomberg
As required by RBI
MIS Purpose
Assessing gain or loss
Ascertaining the volume of business transacted
Front office
Mid Office
Back Office
Alco
Proprietorship
101
Banks are required to maintain SLR in terms of the following
provisions
E)
F)
G)
H)
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)
104
E)
F)
G)
H)
Bearish
Bullish
Piggish
Pessimistic
105
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)
Mid Office
Back office
Front Office
None of the above
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
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
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
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
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)
SEBI
CCIL
FEDAI
ECGC
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)
37. One country depending on another country what they require will lead to .....
E)
F)
G)
H)
Competition
Monopoly
International Trade
Inflation
Risk Taking
Monitoring exposure limits
Quoting Exchange Rates
Manage Investment
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
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)
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
60. Which among the following is not one of the objectives of integrated treasury
I)
J)
K)
L)
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)
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)
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)
Country Risk
Credit Risk
Market Risk
Operational Risk
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
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
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
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