SOLVED CAIIB COMBINED PAPER 25:
1. Forex transactions are classified according to date of deal and date of delivery. Which of the following are correct regarding type of exchange transaction?
(i) TOM: delivery of foreign exchange takes place on the next working day of the contract,
(ii) spot: which is to be settled on the same day,
(iii) Forward: delivery of foreign exchange takes place beyond second working day of the contract
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
2. When there is outward remittance and handling of import bills is involved, which of the following rates will not be applied?
(i) Bills Buying Rate,
(ii) Bills Selling Rate,
(iii) TT Selling Rate
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
3. For the purpose of foreign exchange transactions, foreign banks maintain accounts with ADs in India in Indian rupees. In their mutual communications, ADs in India refer to such accounts as accounts.
a. Loro
b. FCNR
c. Vostro
d. Nostro
Ans - c
4. Mr. Raj purchases a call option for 500 shares of A with strike price of Rs. 140 having maturity after 03 months at a premium of Rs. 40. On maturity, shares of A were priced at Rs. 180. Taking interest cost @ 12% p.a. What is the profit/lost for the individual on the transaction?
a. Profit of Rs. 20000
b. Profit of Rs. 600
c. Loss of Rs. 20600
d. Loss of Rs. 600
Ans: d
Explanation:
This is call option, so it is assumed that,
He will purchase 500 shares of A at a price of 140
Total value of shares is = 70000
Then he will sell the total shares in the market at a price of 180.
500 × 180 = 90000
So profit of 20000 in the transaction.
But he has to pay the premium for call options.
Which is 40 × 500 = 20000
And the fund interest cost will be, 12% p.a. So for 03 months 12/4=3%)
= 20000 × 3/100 = 600
Total premium + premium cost
= 20000 + 600
= 20600
In total,
= 20000 - 20600
= - 600
5. What is the limit for crystalisation period?
a. 15 days
b. 30 days
c. 45 days
d. 60 days
Ans - b
6. Right to buy at a fixed price on or before a fixed date in an option is called as ......
a. Option
b. Call Option
c. Put Option
d. Future Option
Ans - b
7. Who among the following don't govern the broad parameters of the guidelines for export and import credit?
(i) RBI , (ii) FEDAI, (iii) DGFT
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
8. Full fledged money changers are the firms/ organizations authorized to undertake ......
(i) purchase of foreign currency notes, coins and travellers' cheques from the public
(ii) sale of foreign currency notes, coins and travellers' cheques to the public
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
9. Which of the following is correct regarding classification of correspondent accounts?
(i) Nostro: Our account with you,
(ii) Vostro: Your account with us,
(iii) Loro: Their account with them
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
10. Exchange of streams of interest structures are called as ...... Swaps.
a. Financial
b. Interest
c. Currency
d. Forex
Ans - b
11. How many Diamond Dollar Accounts can an Exporter maintain?
a. Only one
b. Two accounts
c. It is matter of discretion for the bank
d. Five
Ans - d
12. All exporters are required to make declaration as per FEMA to the effect that full value of ...... shall be realized within the ...... period:
a.export, 6 months
b.goods, 2 months
c.export, stipulated
d.imports, prescribed
Ans - c
(i) TOM: delivery of foreign exchange takes place on the next working day of the contract,
(ii) spot: which is to be settled on the same day,
(iii) Forward: delivery of foreign exchange takes place beyond second working day of the contract
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
2. When there is outward remittance and handling of import bills is involved, which of the following rates will not be applied?
(i) Bills Buying Rate,
(ii) Bills Selling Rate,
(iii) TT Selling Rate
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
3. For the purpose of foreign exchange transactions, foreign banks maintain accounts with ADs in India in Indian rupees. In their mutual communications, ADs in India refer to such accounts as accounts.
a. Loro
b. FCNR
c. Vostro
d. Nostro
Ans - c
4. Mr. Raj purchases a call option for 500 shares of A with strike price of Rs. 140 having maturity after 03 months at a premium of Rs. 40. On maturity, shares of A were priced at Rs. 180. Taking interest cost @ 12% p.a. What is the profit/lost for the individual on the transaction?
a. Profit of Rs. 20000
b. Profit of Rs. 600
c. Loss of Rs. 20600
d. Loss of Rs. 600
Ans: d
Explanation:
This is call option, so it is assumed that,
He will purchase 500 shares of A at a price of 140
Total value of shares is = 70000
Then he will sell the total shares in the market at a price of 180.
500 × 180 = 90000
So profit of 20000 in the transaction.
But he has to pay the premium for call options.
Which is 40 × 500 = 20000
And the fund interest cost will be, 12% p.a. So for 03 months 12/4=3%)
= 20000 × 3/100 = 600
Total premium + premium cost
= 20000 + 600
= 20600
In total,
= 20000 - 20600
= - 600
5. What is the limit for crystalisation period?
a. 15 days
b. 30 days
c. 45 days
d. 60 days
Ans - b
6. Right to buy at a fixed price on or before a fixed date in an option is called as ......
a. Option
b. Call Option
c. Put Option
d. Future Option
Ans - b
7. Who among the following don't govern the broad parameters of the guidelines for export and import credit?
(i) RBI , (ii) FEDAI, (iii) DGFT
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
8. Full fledged money changers are the firms/ organizations authorized to undertake ......
(i) purchase of foreign currency notes, coins and travellers' cheques from the public
(ii) sale of foreign currency notes, coins and travellers' cheques to the public
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
9. Which of the following is correct regarding classification of correspondent accounts?
(i) Nostro: Our account with you,
(ii) Vostro: Your account with us,
(iii) Loro: Their account with them
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
10. Exchange of streams of interest structures are called as ...... Swaps.
a. Financial
b. Interest
c. Currency
d. Forex
Ans - b
11. How many Diamond Dollar Accounts can an Exporter maintain?
a. Only one
b. Two accounts
c. It is matter of discretion for the bank
d. Five
Ans - d
12. All exporters are required to make declaration as per FEMA to the effect that full value of ...... shall be realized within the ...... period:
a.export, 6 months
b.goods, 2 months
c.export, stipulated
d.imports, prescribed
Ans - c