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Learning Confirmation

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1. Violation of FEMA provisions is a criminal offence.


TRUE
FALSE

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2. Exchange control refers to restriction on imports and exports.


TRUE
FALSE

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3. The correspondent relationship between banks is also known as agency


arrangement.
TRUE

FALSE

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4. The practice of exchange control is unique to India.


TRUE
FALSE

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5. Example of prohibited foreign exchange transaction is the remittance


out of lottery winnings.
TRUE

FALSE

Learning Confirmation

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1. Foreign exchange markets are closed on Saturdays.


TRUE

FALSE
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2. The euro is the most traded currency in foreign exchange markets.


TRUE
FALSE

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3. In the pure form of arbitraging the operator has no investment.


TRUE

FALSE
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4. Buying and selling transactions are always viewed from the bank's
perspective.
TRUE

FALSE
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5. A tom transaction is deliverable on the same day.

TRUE
FALSE

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6. The difference between the bid rate and offer rate in inter-bank
quotation is called spread.
TRUE

FALSE
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7. The largest foreign exchange market in the world is in Singapore.


TRUE
FALSE

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8. European quotations are quotations obtained from the European


markets.
TRUE

FALSE

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9. All inter-bank deals should pass through exchange brokers.


TRUE
FALSE

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10. Exchange rates quoted for a currency by different market


makers may differ, but only to the extent of transaction costs.
TRUE

FALSE

Learning Confirmation

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1. A credit in our nostro account will appear as a credit in mirror account.


TRUE

FALSE

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2. Remittances can be made only to centers where bank holds nostro


accounts.
TRUE
FALSE

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3. Inward remittances which are not credited to accounts appear as pending


credit entries in nostro.
TRUE

FALSE
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4. Selling rate is quoted by bank for outward remittance.

TRUE

FALSE
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5. Mirror account is not required for USD nostro accounts.


TRUE
FALSE

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6. Remittance to meet medical expenses of a relative abroad is a capital


account transaction.
TRUE
FALSE

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7. Remittance permitted under Liberalized Remittance Scheme is USD


300000.
TRUE

FALSE

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8. Form A 1 is used for remitting import payments.


TRUE

FALSE
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9. Foreign contributions to an NGO can be received in any number


of bank accounts.
TRUE
FALSE

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10. In FCRA 2010, Chapter IV deals with procedures relating to


receipt of foreign donation and their utilization in bank accounts.

TRUE

FALSE

Learning Confirmation

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1. Traders react to news when it breaks rather than waiting for markets to
open.
TRUE

FALSE
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2. Reasons for fluctuations in exchange rates can be pin-pointed.


TRUE
FALSE

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3. Mutual funds can also take position in the derivatives market.


TRUE

FALSE
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4. Banks participate in the capital market and money market.


TRUE

FALSE
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5. London is not a major foreign exchange trading center.


TRUE
FALSE

Learning Confirmation

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1. Overdue export bills are crystallized.


TRUE

FALSE
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2. The TT selling rate is applied for payment of import bills.


TRUE
FALSE

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3. The Bill of entry is the ultimate proof of imports.


TRUE

FALSE
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4. Inward remittance for an NRE account comes through SWIFT


message.

TRUE

FALSE
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5. Form A 2 must be furnished by an importer while retiring import bills.


TRUE
FALSE

Learning Confirmation

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Question Results
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1. Foreign exchange was considered a rare commodity till


1970s

1990s
2010s
1980s

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2. Transactions prohibited under rule 3 of the foreign exchange management


current account transactions rules 200 does not apply to:
Payment related to `call back services of telephones

Remittance of interest income on funds held in Non Resident Special Rupee A

Payment of commission on exports under Rupee State Credit Route except up


Remittance for study abroad

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3. Remittance out of lottery winning proceeds is:

Permitted under rule 3 of the foreign exchange management current account t


Prohibited under rule 3 of the foreign exchange management current account

Permitted under rule 3 of the foreign exchange management current account t


Prohibited under rule 3 of the foreign exchange management current account
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4. Section ____ of FEMA Act provides control over repatriation of sale


proceeds of exported goods.
4
5

6
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5. As per section 10 of FEMA Act who is not considered as authorized


dealer?
Exchange Broker

Banks
Restricted Money Changers
Full-fledged Money Changers

Learning Confirmation

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1. IEC code is issued by RBI.


TRUE
FALSE

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2. Exim policy is valid for 5 years.


TRUE

FALSE
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3. Pre-shipment credit can be extended in foreign currency.


TRUE

FALSE
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4. Restricted items can be imported only under a license.


TRUE

FALSE
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5. For making payments against imports the importer has to apply to the
Bank in form A 2.
TRUE

FALSE

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6. Bill of Entry is the documentary evidence of imports.


TRUE

FALSE
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7. State traded goods can be imported by any trader.


TRUE
FALSE

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8. Import licence will indicate the value on CIF basis.


TRUE

FALSE

Learning Confirmation

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1. Settlement of transactions between the banks is easy when there is


accounting relationship.
TRUE

FALSE
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2. Confirming of our L/ C will not be done by our correspondent bank.


TRUE
FALSE

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3. The decision to appoint a bank abroad as correspondent bank depends


on the volume of transactions and direction of flow.
TRUE

FALSE
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4. Unreconciled nostro entries can arise from charges debited by overseas


bank, but not absorbed at our end.
TRUE

FALSE
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5. We do not need the help of correspondent bank in collection of


cheques drawn abroad.
TRUE
FALSE

Learning Confirmation

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1. Authorized Dealers of Category II are not members of FEDAI.

TRUE

FALSE
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2. Violation of FEMA provisions is a criminal offence.


TRUE
FALSE

Score0of 1
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3. The FIMMDA and FEDAI are not nodal agencies for administering rupee
interest rates and foreign exchange benchmarks in the markets.
TRUE
FALSE

Score0of 1
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4. The FEMA has 7 chapters with 49 sections.

TRUE

FALSE
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5. Commercial banks authorized to deal in forex are classified as


Authorized Dealers of Category II.
TRUE
FALSE

Learning Confirmation

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Question Results
Score0of 1
(skipped)

1. Authorized Dealers of Category II are not members of FEDAI.


TRUE

FALSE
Score0of 1
(skipped)

2. Violation of FEMA provisions is a criminal offence.


TRUE
FALSE

Score0of 1
(skipped)

3. The FIMMDA and FEDAI are not nodal agencies for administering rupee
interest rates and foreign exchange benchmarks in the markets.
TRUE
FALSE

Score0of 1
(skipped)

4. The FEMA has 7 chapters with 49 sections.


TRUE

FALSE
Score0of 1
(skipped)

5. Commercial banks authorized to deal in forex are classified as


Authorized Dealers of Category II.
TRUE

FALSE

Learning Confirmation

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1. Card rates are applicable for transactions in international credit cards.


TRUE
FALSE

Score0of 1
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2. Inter-bank rate, based on which merchant rate is quoted is known as base


rate.
TRUE

FALSE
Score0of 1
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3. Bill selling rate is used when export bill is dishonored.


TRUE

FALSE

Score0of 1
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4. Exchange margin is deducted from inter-bank rate to arrive at the


merchant buying rate.
TRUE

FALSE
Score0of 1
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5. The quotation for a merchant transaction is a two-way quotation.


TRUE
FALSE

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6. Interest for transit period is included in bill buying rate


TRUE

FALSE

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7. The rates quoted by a Bank to its trade customers are known as


trading rates.
TRUE
FALSE

Score0of 1
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8. TT rate is applied for transactions where nostro account has


already been credited.
TRUE

FALSE

Learning Confirmation
You have completed your quiz attempt. You have scored 0 point(s).

Question Results
Score0of 1
(skipped)

1. Card rates are applicable for transactions in international credit cards.

TRUE

FALSE

Score0of 1
(skipped)

2. The inter-bank rate, based on which merchant sale rate is quoted, is


known as base rate.

TRUE

FALSE
Score0of 1
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3. The TT selling rate is used when import bill is retired.

TRUE

FALSE

Score0of 1
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4. The exchange margin is added to the inter-bank rate to arrive at the


merchant selling rate.

TRUE

FALSE
Score0of 1
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5. The quotation for a merchant sale transaction is a two-way quotation.

TRUE

FALSE

Score0of 1
(skipped)

6. The selling rates quoted by a bank to its trade customers are known
as trading rates

TRUE

FALSE

Score0of 1
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7. The TT selling rate is applied to transactions where no handling of


documents is involved

TRUE

FALSE

Learning Confirmation
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1. A forward contract provides a perfect hedge for currency exposures.

TRUE

FALSE
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2. OTC derivatives are standardized products.

TRUE

FALSE

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3. A forward contract has attendant credit risk and market risk.

TRUE

FALSE

Score0of 1
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4. Four types of derivative instruments are forwards, futures, options and


swaps.

TRUE

FALSE
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5. Under an option forward contract, the option of choosing the delivery


date within the option period rests with the customer.

TRUE

FALSE
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6. On the due date of a forward contract, the customer may opt for spot
rate, if it is favorable to him.

TRUE

FALSE

Score0of 1
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7. For a receivable due in December, a forward contract can be


booked to fall due in December only, not earlier or later.

TRUE

FALSE

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8. For an exposure in GBP, the customer may choose to book a


forward contract in Euro.

TRUE

FALSE
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9. An option forward contract is also known as option contract.

TRUE

FALSE

Score0of 1
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10. When the customer delivers foreign exchange on the due date,
the transaction is done at the rate agreed.

TRUE

FALSE

Learning Confirmation
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1. A customer can approach the bank for cancellation of a forward contract


when the underlying transaction becomes unproductive.

TRUE

FALSE
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2. A forward contract cannot be cancelled before its due date.

TRUE

FALSE

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3. A contract booked can be partly delivered and partly cancelled by the


customer.

TRUE

FALSE
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4. An option forward contract can be cancelled only by the Bank.

TRUE

FALSE

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5. A customers consent is required for cancellation of forward contract


remaining overdue beyond 15 days from the due date.

TRUE

FALSE

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6. Cover for a deferred payment import is available on roll-over basis.

TRUE

FALSE
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7. The charges for automatic cancellation do not include exchange


difference.

TRUE

FALSE

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8. The interest on the outlay of funds is recovered from the customer


in the case of early delivery.

TRUE

FALSE
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9. Interest on outlay of funds is not collected if the amount is less


than Rs.100.

TRUE

FALSE

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10. Rule 8 of FEDAI pertains to automatic cancellation of forward


contracts.

TRUE

FALSE

Learning Confirmation
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1. Early extension of forward contract does not involve cancellation and


rebooking.

TRUE

FALSE

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2. Where forward margin is in premium it will be rounded off to the lower


month (or rate at the previous month) to arrive at forward buying rate.

TRUE

FALSE
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3. Re-booking is done at the old contracted rate.

TRUE

FALSE

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4. Cancellation is done at the relevant forward rate.

TRUE

FALSE
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5. FEDAI has clarified that it would not be necessary to load exchange


margins when both the cancellation and re-booking of forward contracts
are undertaken simultaneously.

TRUE

FALSE
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6. Early extension of forward contracts is regulated by SEBI.

TRUE

FALSE

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7. Extension of forward contract on due date is regulated by Forward


Markets Commission.

TRUE

FALSE

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8. Forward contract is an OTC product.

TRUE

FALSE
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9. Request for extension of forward contract before due date should


be rejected.

TRUE

FALSE

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10. Before an overdue forward contract is cancelled by the bank,


the customer may request its extension.

TRUE

FALSE

Learning Confirmation
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1. A currency swap involves exchange of interest rate payments and principal


amounts.

TRUE

FALSE
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2. Basis swaps are cash flows where both the legs of the swap are
referenced to the same floating rates.

TRUE

FALSE

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3. The bench mark rate in the case of IRS is already determined.

TRUE

FALSE

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4. Prices of IRS are quoted in terms of floating leg.

TRUE

FALSE

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5. An IRS is a series of FRAs.

True

False
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6. Capital adequacy for the Bank for undertaking swap need not be
calculated.

TRUE

FALSE

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7. In the Indian market Banks are allowed to run a book of swaps


which have an INR leg.

TRUE

FALSE
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8. The IRS cannot be used by scheduled commercial banks for their


own balance sheet management.

TRUE

FALSE

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9. The ISDA with suitable modification is the standard


documentation for IRS.

TRUE

FALSE
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(skipped)

10. There is no currency risk in Differential swaps.

TRUE

FALSE

Learning Confirmation
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1. Put option gives the holder the right to sell a specified quantity of underlying
asset.

TRUE

FALSE
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2. Mutual funds are players in the options market.

TRUE

FALSE
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3. CBOE is an abbreviation for Company Board of Options Exchange

TRUE

FALSE

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4. Banks are players in the options market.

TRUE

FALSE
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5. Spot price in addition to the strike price is equal to intrinsic value of an


option.

TRUE

FALSE

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6. The underlying for an option can be physical commodities.

TRUE

FALSE

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7. European option can be exercised on or before the expiration date.

TRUE

FALSE

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8. Open interest refers to the total number of option contracts


outstanding in the market at any given point of time.

TRUE

FALSE
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9. Option casts an obligation on the buyer.

TRUE

FALSE

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10. Options and forward contracts are the same.

TRUE

FALSE

Learning Confirmation
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1. The size and maturity of a futures contract is customized.

TRUE

FALSE

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2. The maturity and size of futures contracts are standardized.

TRUE

FALSE
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3. Markets for forward contracts are liquid.

TRUE

FALSE

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4. Futures contracts are liquid.

TRUE

FALSE
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5. Marking to market of outstanding positions at the end of each trading


day is a feature of futures market.

TRUE

FALSE
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6. Either party can walk away unilaterally from the forward contract.

TRUE

FALSE

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7. A forward contract is an OTC agreement.

TRUE

FALSE
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8. Counter-party risk exists in futures contract.

TRUE

FALSE

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9. The physical delivery of futures contract is minimal and positions


are normally closed out by opposite trades.

TRUE

FALSE
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10. Futures are not available on bonds.

TRUE

FALSE

Learning Confirmation
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1. Residents of a country do not indulge in economic activities with the


residents of other countries.

TRUE

FALSE

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2. Official reserves account is one of the components of BoP statement.

TRUE

FALSE
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3. India's forex reserves on December 2014 was sufficient to meet 8


months of imports.

TRUE

FALSE

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4. A change in the balance of payments of a country will affect the


exchange rate of its currency.

TRUE

FALSE
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5. Exchange control means exchange restriction only.

TRUE

FALSE

Learning Confirmation
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1. ECB is governed by:

Foreign Exchange Regulation Act

Securitization and Reconstruction of Financial Assets and Enforcement of Sec

Debt Recovery Tribunal Act

Foreign Exchange Management Act

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2. Which of the following statements is true for financial institutions and


banks for obtaining ECBs under Automatic Route?

The maximum limit of ECB is US$20 million.

The maximum limit of ECB is US$50 million.

There is no limit for them under Automatic Route.

They cannot access ECB funds under Automatic Route.

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3. Refinancing an existing ECB means:

Obtaining additional finance against security of the existing ECB

Substituting an existing ECB with a fresh ECB

Pre-payment of an existing ECB

Getting a new ECB without disturbing the existing ECB


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4. When Authorized Dealers issue guarantee, LC or LOU for Trade


Credits:

Reporting to RBI is not required up to US$20 million.

Reporting to RBI is to be made in the prescribed proforma.

Reporting is to be made only if the amount exceeds US$5 million.

Reporting is required only if guarantee, LC, or LOU is for unlimited amounts


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5. ECB funds can be used for:

Investment in share market

Investment in projects

Investment in real estate

Investment in agricultural activities


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6. For ECB under Automatic Route, RBI provides:

Loan Registration Number

Loan Pre-payment Permission

Loan Installment Payment Number

Loan Interest Payment Number


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7. For ECB under Approval Route, prior approval should be obtained


from:

Government of India

Reserve Bank of India

Ministry of External Affairs

Ministry of Finance

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8. ECB can be raised only by:

Firms and companies

Multi-national companies

Corporates registered under the Companies Act

Banks
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9. For the purpose of classification, ECB is a part of:

Balance of Payment

Balance of Trade

Current Account

Capital Account

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10. What is the present all-inclusive cost limit for interest payable
on ECBs for more than five years?

LIBOR + 300 basis points

LIBOR + 500 basis points

LIBOR + 350 basis points

There is no ceiling on interest payable

Learning Confirmation
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1. Exporters should submit quarterly progress reports to all the members of


the Working Group.

TRUE

FALSE
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2. Bid bond guarantee does not help contractors to participate in global


tenders.

TRUE

FALSE

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3. Retention Money Guarantee enables the exporter to obtain release of


retained payments from the client.

TRUE

FALSE
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4. Exim Bank is the focal point in Working Group.

TRUE

FALSE
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5. Technology transfer is not classified as project export.

TRUE

FALSE

Learning Confirmation
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Question Results
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1. SWIFT cannot be considered as a payment mechanism.

TRUE

FALSE

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2. An LC is a payment mechanism.

TRUE

FALSE
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3. A bid-bond guarantee issued by the bank helps importer of diamonds


participate in the auction abroad.

TRUE

FALSE
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4. Guarantee is a non-fund based limit.

TRUE

FALSE
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5. ECB is a fund based facility from a bank in India.

TRUE

FALSE

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6. Buyer's credit is a form of trade credit.

TRUE

FALSE
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7. Use of ACU mechanism does not save cost for an Indian importer.

TRUE

FALSE

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8. Opening charges and commitment charges are collected by the


bank establishing an import letter of credit.

TRUE

FALSE

Learning Confirmation
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1. RBI has fixed a monetary ceiling for use of international credit card for
payment.

TRUE

FALSE

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2. Use of International credit cards for payment in forex in Nepal and Bhutan
is not permitted.

TRUE

FALSE
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3. SWIFT facilitates outward remittance from India.

TRUE

FALSE
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4. Cash advances on international credit card attract finance charges.

TRUE

FALSE
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5. Travel cards are not pre-paid.

TRUE

FALSE

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6. Wire transfer is a mode of outward remittance from India.

TRUE

FALSE
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7. Foreign currency demand draft can be issued only in USD.

TRUE

FALSE

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8. Correspondent banking helps in issuance of demand draft.

TRUE

FALSE

Learning Confirmation
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1. FCRA 1976 now stands repealed.

TRUE

FALSE
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2. Advance intimation on proposed inspection is not given by Monitoring Unit.

TRUE

FALSE

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3. FCRA 2010 is applicable to HUF.

TRUE

FALSE

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4. Interest earned on foreign contribution is also treated as foreign


contribution.

TRUE

FALSE
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5. More than 50% of foreign contribution received can be utilized for


administrative expenses without prior approval of Central Government.

TRUE

FALSE

Learning Confirmation
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1. A remitter under LRS need not have been a customer since one year.

TRUE

FALSE

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2. FEMA 1999 does not apply to remittances made by residents.

TRUE

FALSE

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3. FEMA 1999 defines the current account and capital account


remittances.

TRUE

FALSE
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4. Prior remittance, the remitter should have maintained an account with


the concerned branch for at least one year.

TRUE

FALSE
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5. A resident going abroad as a tourist can carry foreign currency to the


extent of USD 4,000.

TRUE

FALSE

Learning Confirmation
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1. Interest on NRO SB is taxable.

TRUE

FALSE
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2. An FCNR account can also be opened as a savings deposit.

TRUE

FALSE

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3. On maturity, the repayment of an FCNR account in one foreign currency


can be made in another foreign currency.

TRUE

FALSE
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4. Inward remittance for an NRE account comes through SWIFT message.

TRUE

FALSE
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5. Interest rates on FCNR accounts are not linked to LIBOR.

TRUE

FALSE

Learning Confirmation
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Question Results
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1. EEFC accounts can be maintained in USD only.

TRUE

FALSE

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2. EEFC accounts save on transaction costs.

TRUE

FALSE
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3. A close relative can be a joint EEFC accountholder on former or survivor


basis.

TRUE

FALSE
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4. An EEFC account can be opened as a savings account.

TRUE

FALSE

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5. The funds in an EEFC account can be used for payment of customs


duty.

TRUE

FALSE

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6. Only after foreign exchange is realized, the EEFC account is


credited.

TRUE

FALSE
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7. The balance amount in the account is eligible for grant of fund


based facility.

TRUE

FALSE

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8. Airfare and hotel expenses can be paid in foreign currency from an


EEFC account.

TRUE

FALSE