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BFM-MODULE-A

Chapt
er1:
FOREI
GNEXCHANGE

Wewi
llst
udysomei
mpor
tantMCQs
Ques1:For
eignExchangemeans?
A)Homecur
rency
B)For
eigncur
rency
C)I
MFcur
rency
D)WBcur
rency
Ques2:Theexchangesratesofmaj
or
cur
renci
esf
luct
uateever
y ?
A)4Day
s
B)4mi
nut
es
C)4Seconds
D)4Hour
s

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Ques3:TheFOREXmarket
sar
edy
nami
cand
roundt
hecl
ockmarket
s.
A)Tr
ue
B)Fal
se

Ques4:FOREXmarket
sar
enotaf
fect
edby
Gover
nmentpol
ici
es.
A)Tr
ue
B)Fal
se
Ques5:Howmany%oft ot
algl
obalFOREX
tur
noveri
srel
atedtoi
nvestmentand
specul
ati
vetr
ade?
A)2%
B)98%
C)50%
D)75%

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Ques6:
For
eignExchangemar
ket
sar
e
(
a)r
egi
onalmar
ket
s.
(
b)domest
icmar
ket
s.
(
c)gl
obalmar
ket
s.
(
d)l
ocal
izedexchanget
radedmar
ket
s.
Ques7:
For
eignexchangedoesnoti
ncl
ude:
(
a)Deposi
tspay
abl
einf
orei
gncur
rency
.
(b)Inst
rumentsdrawninforei
gncur
rencyand
payableinafor
eigncur
rency
.
(c)Instr
umentsdrawninI
ndianr
upeesona
checkingaccountoft
hedrawerandpay
abl
e
abroad.
(d)instr
ument
sdrawni
nI ndi
anr upeesona
curr
entaccountofan I
ndian company and
payableinI
ndi
a.

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Ques 8 :Outof t he sever

alfactor
s,the
fol
lowingfact
ordoesnothaveaneffecti
nthe
mov ementofexchanger
ates?
(
a)Pol
it
icali
nst
abi
l
ity
(
b)I
ncr
easei
ndomest
ici
nter
estr
ates
(
C)I
ncr
easei
ndomest
ict
our
ism
(
d)Changei
nTaxat
ionpol
icy
Ques9:
Spotdeal
i
ngi
nFXmar
ketmeans
(a)Deli
ver
yoffundsisont
he30t
hwor
kingday
f
rom t
hedateofdeal
.
(
b)Deli
ver
yoffundsisont
hesecondwor
kingday
f
rom t
hedateofdeal
.
(c)Del
iv
eryoff
undsi
snextdat
efr
om t
hedat
eof
deal
.
(d)Del
iv
eryoff
undsi
soneweekaf
tert
hedat
eof
deal
.

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Ques10:Therat
eatwhichthequot
ingbanki
s
readyt
osel
lthecur
rencyi
scall
ed
(
a)Bi
drat
e. (
b)Of
ferr
ate.
(
c)TTBuy
ingr
ate. (
d)Swapr
ate.
Ques11:
Oper
ati
onalRi
skdoesnoti
ncl
ude:
(
a)mov
ementi
nexchanger
ates.
(
b)Humaner
ror
s.
(
c)Techni
calFaul
ts.
(
d)Sy
stemi
cfai
lur
es.
Ques12:Cancel
lat
ionoff
orwar
dcont
act
sist
o
bedoneat
(
a)Opposi
teBi
llr
ate.
(
b)Opposi
teCashr
ate.
(
c)Opposi
teTTr
ate.
(
d)Opposi
teTCr
ate.

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Ques13:Cr
yst
all
izat
ionofexpor
tbi
ll
sist
obe
done:
(
a)Ont
he10t
hdayf
rom t
heduedat
eoft
hebi
ll
s.
(
b)Bef
oret
heduedat
e.
(
c)Aspert
hepol
icyoft
heBank.
(
d)Ont
heduedat
eit
sel
f.
Ques14:Mai
nfact
orsaf
fect
ingexchange
rat
esare
A)Fundament
al
B)Techni
cal
C)Specul
ati
on
D)Al
loft
heAbov
e
Ques15:InaTOM cont
ract
,set
tl
ementof
fundst
akespl
aceonthe
A)SameDay(
T) B)Tomor
row (
T+1)
C)Dayaf
tert
omor
row(
T+2) D)None
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Ques16:Thecur
rencyi
scost
li
eri
nfor
war
d,i
t
i
ssaidt
obeat
A)Di
scount
B)Pr
emi
um
C)SameRat
e
D)None
Ques17:Therat
eatwhichthequot
ingpar
tyi
s
readyt
obuythecur
rencyi
scall
ed
A)Of
ferorAskRat
e
B)Bi
dRat
e
C)Sel
li
ngRat
e
D)None
Ques18:Ifthef
orwar
dval
ueoft
hecur
rencyi
s
cheaper
,iti
ssaidt
obeata
A)Di
scount B)Pr
emi
um
C)SameRat
e D)None
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Ques19:
Thedat
eofset
tl
ementoff
undsi
s
knownas
A)Tr
anscat
ionDat
e B)Buy
ingdat
e
C)Val
ueDat
e D)Sel
li
ngDat
e
Ques20:
InaREADY/CASHcont
ract
,
set
tl
ementoff
undst
akespl
aceonthe
A)SameDay(
T)
B)Tomor
row (
T+1)
C)Dayaf
tert
omor
row(
T+2)
D)None
Ques21:
Dir
ectquot
esar
eal
socal
led
A)For
eignCur
rencyQuot
ati
on
B)HomeCur
rencyQuot
ati
on
C)Buy
ingQuot
ati
on
D)None

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Ques22:Whi
chonedi
rectquot
ati
on?
A)GBP/
INR=12.
77/
68
B)I
NR/
USD=0.
1234/
1255
C)I
NR/
JPY=58.
2497/
2650
D)None
Ques23:Whi
chonei
ndi
rectquot
ati
on?
A)
GBP/
INR=12.
77/
68
B)USD/
INR=70.
2454/
3245
C)I
NR/
JPY=58.
2497/
2650
D)None
Ques24:For
eignExchangeMar
ket
sar
e--
marketwi
thnobarri
ers.
A)Localmar
ket B)Gl
obalmar
ket
C)j
ustl
ikef
ishmar
ket D)None

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Ques25:Riskofl
ossar
isi
ngduetoinabi
li
tyor
unwil
li
ngnessoft
hecount
erpar
tytomeeti t
s
obl
igat
ions
A)Oper
ati
onal
risk
B)Cr
edi
tRi
sk
C)Exchanger
isk
D)None
Ques26:---gui
del
inesprescri
becodeof
conductf
ordeal
ersbrokers.
A)FEDAI B)Mi
nist
ryofFi
nance
C)Gov
ernment D)None
Ques27:Whichkindofdealspr
ovi
dedept
h
andl
iqui
dit
ytothemarket.
A)Wor
ldt
rade B)Cur
rencyexchange
C)Specul
ati
ve D)None

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Ques28:Whymost
lySPOTr
atei
susedi
n
For
ex?
A)Duet
olongdi
stance
B)Duet
odi
ff
erentt
imezone
C)Duet
oGov
ernment
D)None
Ques29:FEMA1999i
s
A)For
eignExchangeMast
erAct
B)For
eignExchangeManagementAct
C)For
eignExchangeMai
nAct
D)None
Ques30:OTCi
s
A)Ov
ert
heCal
l B)Ov
ert
heCash
C)Ov
ert
heCount
er D)None

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Ques 31:A dealwas done on 1 Jul

y and
sett
lementoffundt
akeplaceon5Jul ythen
thi
siscall
ed?
A)Spotr
ate
B)Readyr
ate
C)Tom r
ate
D)For
war
drat
e

Ques32:A dealwasdoneon12Juneand
sett
lementoffundt
akepl
aceon14June,t
hen
thi
siscall
ed?
A)Spotr
ate
B)Readyr
ate
C)Tom r
ate
D)For
war
drat
e

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Ques33:I
fSpotrat
e i
s68.40/50 and 1M
For
war
drat
eis68.
10/
20t
hencur
rencyisat
A)Pr
emi
um
B)Di
scount
C)Samer
ate
D)None
Ques34:I
fUSD/
INRi
s70.
10/
20,
thent
hisi
s
cal
led?
A)I
ndi
rectr
ate
B)Di
rectr
ate
C)Tom r
ate
D)For
war
drat
e
Ques35:PercentandPerMi
ll
imeansonepar
t
outofhowmanypar t
s?
A)100,
100 B)100,
1000
C)1000,
100 D)1000,
1000
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Ques36:Ifapersonisbuy i
ng200doll
arsat
onepl
aceandselli
ngsamequant i
tyofdollar
s
i
nanothermarketorplace.Thent
hisprocess
i
scall
ed?
A)Ar
bit
rage
B)Set
tl
ement
C)Pr
ofi
t
D)None
Ques37:I
faforwardsal
econtr
actiscancel
ed
t
henwhichrat
ewillbeappl
iedf
orthis?
A)TTsel
li
ng B)TTbuy
ing
C)Bi
llsel
li
ng D)Bi
llbuy
ing
Ques38:Whi
chcur
rencyi
snotquot
edi
n
mult
ipl
eof100?
A)JPY B)Rupi
ah
C)Shi
ll
ing(
Keny
an) D)Dol
lar

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Ques39:Whi
chcur
rencyi
squot
edi
nIndi
rect
rat
eonl
y?
A)GBP
B)EURO
C)AUD
D)Al
loft
heabov
e

Ques40:A customercomet oyourbranch

wit
h2000USDandaskf orr
upeeinexchange
ofdol
lar
.Whi
chr
atewil
lyouappl
y?
A)TTBUYI
NG
B)TTSELLI
NG
C)BI
LLBUYI
NG
D)BI
LLSELLI
NG

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ANSWERS:
1-
B 10-
B 19-
C 28-
B 37-
B
2-
C 11-
A 20-
A 29-B 38-
D
3-
A 12-
C 21-
B 30-
C 39-
D
4-
B 13-
D 22-
A 31-D 40-
A
5-
B 14-
D 23-
C 32-
A
6-
C 15-
B 24-
B 33-
B
7-
D 16-
B 25-
B 34-B
8-
C 17-
B 26-A 35-B
9-
B 18-
A 27-C 36-
A

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