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TxB Academy

Mock Test

Certificate Course in Foreign Exchange

1. The questions are copyright protected

2. Strictly for internal use

3. The mock test does not have any pass percentage.

4. Study of full text (6 books) is necessary to pass the examination as there may be sub-sections with
minimum pass marks for each sub-section.

1. FEDAI is a self-regulatory body

True /False

2. FEDAI was formed in

a. 1947

b. 1950

c. 1958

d. 1991

3. Does FEDAI have an Education Committee

Yes/No

4. Which of the following is a function of FEDAI?

a. Accrediting intermediaries viz. brokers and electronic service providers

b. Monitoring the broking activity in the interbank forex market

c. Providing inputs to ICC

d. All the above

5. Which of the benchmark rates are administered by FEDAI?

a. Base rates for FCNR (B) Deposits

b. Month end revaluation rates


c. a & b

d. only b

6. Are banks required to display their card rates for foreign currencies on their websites and/or their B Category
branches?

Yes/No

7. No customer transaction for INR/FCY should be undertaken by Authorised Dealers after

a. 5.00 pm

b. 4.45 pm

c. 4.30 pm

d. 4.00 pm

8. Export bill payable in countries with externalization issues need not be crystallised

True /False

9. In case of non-payment on due date of export bills that was purchased/discounted/negotiated, the foreign
currency liability has to be crystallised. For handling such cases AD* should

a. formulate own policy

b. be guided by RBI

c. be guided by FEDAI

10. Normal Transit Period (NTP) is meant for

a. Time taken for delivery of shipping documents

b. Time taken for delivery of goods

c. Time taken between availing of post shipment credit and receipt of bill proceeds.

d. All the above

11. NTP for Bills in Foreign Currencies is ___ days

a. 15

b. 20

c. 25

d. 30
12. After receipt of credit advice/statement of nostro account and compliance of guidelines, if there is a delay in
crediting proceeds of export collection, is the exporter entitled for compensation?

Yes/No

13. When a bank defaults in sending Form A3, what is the maximum claim amount against the bank is Rs._____

a. 1000

b. 10000

c. 5000

d. No cap

14. If a forward contract is cancelled after maturity, the customer is eligible for profit/loss arising from the
cancellation

True/False

15. Simply put, premium/discount arises out of interest rate difference between two currencies.

True/False

16. Two way quotes does not help add depth and liquidity in foreign exchange market

True/False

17. In the absence of any instructions from the customer a contract which has matured shall be cancelled by the
bank on the _______ working day after the maturity date

a. 2nd

b. 3rd

c. 5th

d. 7th

18. When the maturity date of a forward contract falls on a known holiday the settlement will be on

a. Next working day

b. Preceding working day

c. Same day

d. Nearest month end date

19. "KNOWN HOLIDAY" is one which is known at least _____ working day before the date
a. 3

b. 2

c. 5

d. 7

20. The member banks of FEDAI are bound by FEDAI in determining the charges for various types of forex
transactions offered

True/False

21. For forward booked under "Contracted Exposure" the underlying documents are to be submitted within _____
days

a. 2

b. 5

c. 7

d. 15

22. Cost Reduction Structures (CRS) derivatives products should be offered to companies with a minimum networth
of __ Crore.

a. 50

b. 100

c. 200

d. 500

23. After transfer of funds between VOSTRO accounts with two banks the bank carrying out interbank VOSTRO
transfer by RTGS should sent form A3 so as to reach the beneficiary within ____ working days

a. 3

b. 5

c. 7

d. 10

24. SALE contracts shall be cancelled at ____ RATE of the contracting AD

a. Bill Buying

b. TT Buying
c. Currency selling

d. TT selling

25. NO FOREIGN EXCHANGE contract can be made with an intermediary as a PRINICIPAL

True/False

26. US$ 1 = Rs.65.50 is an Indirect Quote

True/False

27. For cancellation of a forward purchase contract ____ rate is applied

a. TT Selling

b. TT Buying

c. Bill Buying

d. Bill Selling

28. ______ contracts are standardised and traded on an exchange

a. Forward

b. Futures

c. Derivatives

d. Options

29. The maximum loss that the buyer faces in a options deal is

a. Deal amount

b. Unlimited

c. Exchange fluctuation

d. Option premium

30. The maximum loss that the buyer faces in a options deal is

a. In the money

b. At the money

c. Out of the money

31. The price at which the option buyer has the right to buy or sell is called
a. Premium

b. Strike price

c. Delta

d. Gamma

32. In trading ______ option the buyer may exercise the option on or before the maturity date

a. European

b. American

c. Traditional

d. Continental

33. In the Indian scenario usually writing of options by customer is not permitted

True/False

34. A derivative instrument or product is one whose value changes with changes in one or more underlying market
variables such as equity or commodity prices, interest rates or foreign exchange rates

True/False

35. Forward contract is a non-binding agreement between two parties to purchase and sell a specific quantity of
foreign currency at a specified price but with delivery and settlement as a specified future date.

True/False

36. A future contract is an agreement between two parties to buy or sell an asset at an uncertain time in future for a
certain price

True/False

37. An option contract is the right to buy or sell a specific quantity of a given asset as a specific price after a specific
date in the future.

True/False

38. European options can be exercised only on the maturity date

True/False

39. A single limit under past performance can be used for imports and exports.

True/False
40. For calculating limit for past performance for exporter as well as importer, banks can take average of three
years’ export/import turnover or last year’s export/import turnover, whichever is lower.

True/False

41. Once cancelled, forward contracts booked under past performance cannot be rebooked.

True/False

42. Under special dispensation, SMEs can book, cancel, rollover forward contracts without production of underlying
documents subject to certain conditions

True/False

43. Under special dispensation for Residents, can an individual book forward contract?

Yes/No

44. Can foreign portfolio investor book forward contract?

Yes/No

45. Association of Cambiste International is an organisation committed to the profession of

a. Accounting

b. Money laundering

c. Foreign exchange dealing

d. Correspondent Relationship.

Tips!

1. Remember the definitions, particularly those under chapter ‘ Forward Contracts and Other Derivatives’

2. Work out practical examples on Exchange Arithmetic given at the end of the book.

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