Test Your NISM-Series-13: Common Derivatives Mock Test Knowledge in 5 Minutes

1. Which statement correctly describes a derivative product?

A. A financial product whose value is linked to one or more underlying assets B. Private agreements between two parties only C. Complex instruments traded mostly by banks and financial institutions D. Products traded only on commodity exchanges

2. Which term best describes EUR currency?(NISM workbook)

A. Free floating B. Pegged to gold C. Pegged to USD D. Managed float

3. Which of the following is true?(NISM workbook)

A. Quotation currency is the first currency in a currency pair B. Exchange rates are quoted in per unit of quotation currency C. Base currency is the second currency in a currency pair D. Base currency is the first currency in a currency pair

4. Assume you are an exporter, and you want to sell USD that you have received as export remittance. The bank quotes a price of 75.10 / 75.12 for USDINR. At what price can you sell one unit of USD?(NISM workbook)

A. 75.11 B. 75.09 C. 75.12 D. 75.10

5. Which of the following is the role of derivatives?(NISM workbook)

A. Cash or liquidity management B. Financing C. Risk management D. All of the above

6. Participant who take position in Currency Derivatives to reduce currency risk?(NISM workbook)

A. Hedgers B. Speculators C. Arbitragers D. None of the above

7. Which of the following is derivatives?(NISM workbook)

A. Currency Swaps B. Currency Futures C. Currency Forward D. All of the above

8. Following derivatives contracts are traded only on Exchanges?(NISM workbook)

A. Currency Swaps B. FX Swaps C. Currency Options D. Currency Futures

9. What is the settlement method for USDINR futures?(NISM workbook)

A. Cash B. Can be cash or physical C. Physical / Based on Delivery D. None of the above

10. Which of the following is the last trading day for EURINR monthly futures contract?(NISM workbook)

A. Seven business days before the last business day of the Expiry Month B. One business days after the first business day of the Expiry Month C. Two working days prior to the last business day of the expiry month D. Last Thursday of Contract Month