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Tuesday, October 23, 2018

BFM Mix Set -1 : Module A

Deepa:
The exchange rate is
(a) the price of one currency relative to gold.
(b) the value of a currency relative to inflation.
(c) the change in the value of money over time.
(d) the price of one currency relative to another.
(e) all of the above.


2) Exchange rates are determined in
(a) the money market.
(b) the foreign exchange market.
(c) the stock market.
(d) the capital market.
(e) both (b) and (c) of the above.

3) Although market trades are said to involve the buying and selling of currencies, most trades involve the buying and selling of
(a) bank deposits denominated in different currencies.
(b) SDRs.
(c) gold.
(d) ECUs.

4) The immediate (two-day) exchange of one currency for another is a
(a) forward transaction.
(b) spot transaction.
(c) money transaction.
(d) exchange transaction.
(e) daily transaction.

5) An agreement to exchange dollar bank deposits for euro bank deposits in one month is a
(a) spot transaction.
(b) future transaction.
(c) forward transaction.
(d) monthly transaction.
(e) deposit transaction.

6) Today 1 euro can be purchased for $1.10. This is the
(a) spot exchange rate.
(b) forward exchange rate.
(c) fixed exchange rate.
(d) money exchange rate.
(e) financial exchange rate.

7) In an agreement to exchange dollars for euros in three months at a price of $0.90 per euro, the price is the
(a) spot exchange rate.
(b) money exchange rate.
(c) forward exchange rate.
(d) monthly exchange rate.
(e) fixed exchange rate.

8) When the value of the British pound changes from $1.25 to $1.50, then
(a) the pound has appreciated and the dollar has appreciated.
(b) the pound has depreciated and the dollar has appreciated.
(c) the pound has appreciated and the dollar has depreciated.
(d) the pound has depreciated and the dollar has depreciated.

9) When the value of the British pound changes from $1.50 to $1.25, then
(a) the pound has appreciated and the dollar has appreciated.
(b) the pound has depreciated and the dollar has appreciated.
(c) the pound has appreciated and the dollar has depreciated.
(d) the pound has depreciated and the dollar has depreciated.

10) When the value of the dollar changes from 0.5 pounds to 0.75 pounds, then
(a) the pound has appreciated and the dollar has appreciated.
(b) the pound has depreciated and the dollar has appreciated.
(c) the pound has appreciated and the dollar has depreciated.
(d) the pound has depreciated and the dollar has depreciated.

11) When the value of the dollar changes from 0.75 pounds to 0.5 pounds, then
(a) the pound has appreciated and the dollar has appreciated.
(b) the pound has depreciated and the dollar has appreciated.
(c) the pound has appreciated and the dollar has depreciated.
(d) the pound has depreciated and the dollar has depreciated.

12) When the exchange rate for the Mexican peso changes from 9 pesos to the dollar to 10 pesos to the dollar, then
(a) the peso has appreciated and the dollar has appreciated.
(b) the peso has depreciated and the dollar has appreciated.
(c) the peso has appreciated and the dollar has depreciated.
(d) the peso has depreciated and the dollar has depreciated.

13) When the exchange rate for the Mexican peso changes from 10 pesos to the dollar to 9 pesos to the dollar, then
(a) the peso has appreciated and the dollar has appreciated.
(b) the peso has depreciated and the dollar has appreciated.
(c) the peso has appreciated and the dollar has depreciated.
(d) the peso has depreciated and the dollar has depreciated.

14) In April 2000, one U.S. dollar traded on the foreign exchange market for about 7.2 French francs. Therefore, one French franc would have purchased about
(a) 4.10 U.S. dollars.
(b) 1.40 U.S. dollars.
(c) 0.41 U.S. dollars.
(d) 0.14 U.S. dollars.

15) In April 2000, one U.S. dollar traded on the foreign exchange market for about 44 Indian rupees. Thus, one Indian rupee would have purchased about
(a) 0.01 U.S. dollars.
(b) 0.02 U.S. dollars.
(c) 0.20 U.S. dollars.
(d) 2.00 U.S. dollars.

16) In April 2000, one U.S. dollar traded on the foreign exchange market for about 180 Spanish pesetas.
Therefore, one Spani

sh peseta would have purchased about
(a) 0.005 U.S. dollars.
(b) 0.05 U.S. dollars.
(c) 0.50 U.S. dollars.
(d) 5.00 U.S. dollars.

17) In April 2000, one U.S. dollar traded on the foreign exchange market for about 1.47 Canadian dollars. Therefore, one Canadian dollar would have purchased about
(a) 2.30 U.S. dollars.
(b) 1.15 U.S. dollars.
(c) 0.67 U.S. dollars.
(d) 0.56 U.S. dollars.

18) At the beginning of 1980, the French franc was valued at 25 cents and in early 1988 it was valued at 17.5 cents. Thus, from 1980 to 1988, the dollar _ and the franc _.
(a) appreciated; appreciated
(b) appreciated; depreciated
(c) depreciated; depreciated
(d) depreciated; appreciated

19) If the dollar _ from 1.0 European euros per dollar to 0.9 euros per dollar, the euro _ from
1.0 dollar to 1.1 dollars per euro.
(a) appreciates; appreciates
(b) appreciates; depreciates
(c) depreciates; depreciates
(d) depreciates; appreciates

20) If the dollar _ from 5 Mexican pesos per dollar to 10 pesos per dollar, the peso _ from 20 cents to 10 cents per peso.
(a) appreciates; appreciates
(b) appreciates; depreciates
(c) depreciates; depreciates
(d) depreciates; appreciates

1) Answer: D
2) Answer: B
3) Answer: A
4) Answer: B                                                                                             5) Answer: C
6) Answer: A
7) Answer: C
8) Answer: C
9) Answer: B
10) Answer: B
11) Answer: C
12) Answer: B
13) Answer: C
14) .Answer: D
15) Answer: B
16) Answer: A
17)Answer: C
18) Answer: B
19) Answer: D
20) Answer: B

Devil:
As per a call option, You can buy USD 60000 at a strike price of Rs. 64 per USD with expiry at the end of 2 months. In this case,

1. If the spot price of USD is Rs. 65 on the expiry day, it is an :

a. in-the-money option
b. out-of-money option
c. at-the-money option
d. american option
.............................................

2. If the spot price of USD is Rs. 63 on the expiry day, it is an :

a. in-the-money option
b. out-of-money option
c. at-the-money option
d. american option
.............................................

3. If the spot price of USD is Rs. 64 on the expiry day, it is an :

a. in-the-money option
b. out-of-money option
c. at-the-money option
d. american option
.............................................

Stuti:
1-a,2-b,3-c


...........................................
Devil:
Interbank rate US Dollar
 Spot USD 1 = Rs. 48.6000/6075
 1 Month 3500/3600
 2 Months 5500/5600
 3 Months 8500/8600
 4 Months 1.1500/1.1600
 5 Months 1.3500/1.3600
 6 Months 1.5500/1.6600
Transit period is 25 Days. All forward Rates are for Fixed Delivery Exchange Margin is 0.10%.

From the above information, calculate :

1. Ready Bill Buying Rate

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

2. 2 Months Forward Buying Rate for Demand Bill

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

3. 3 Months Forward Buying Rate for Demand Bill

a. 48.5000
b. 49.1000
c. 49.4000
d. 49.7000

4. 4 Months Forward Buying Rate for Demand Bill

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

Ans - d

5. Ready Rate for 60 Days Usance Bill

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

6. 2 Months Forward Buying Rate for 60 Days Usance Bill

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

7. 1 Month Forward Buying Rate for 30 Days Usance Bill

a. 48.5525
b. 49.1000
c. 49.4500
d. 49.7000

8. 2 Months Forward Buying Rate for 30 Days Usance Bill

a. 48.5000
b. 49.1000
c. 49.4000
d. 49.7000

Meenakshi:
XYZ Bank’s foreign correspondent maintaining a Nostro Rupee account with XYZ bank, wants to fund his account by purchase of Rs. 10.00 million, against US dollars. Assuming that the USD/INR interbank market is at 56.2380/2420, what rate would be quoted to the correspondent, ignoring exchange margin? Calculate amount of USD XYZ Bank would receive in its USD Nostro account, if the deal is struck.

a. 175438.60
b. 177803.07
c. 177815.71
d. 178571.43

Ans - c

Explanation :

The transaction is to sell Rs 10.00 million, against US dollars.
Hence the XYZ Bank would quote the lower of the two rates, i.e. 56.2380.
If the deal is struck, the foreign bank would pay Rs. 10000000/56.2380 = USD 177815.71 to XYZ Bank USD Nostro account.



Baswaraju Rajesh:
What is retirement of import bill??

Meenakshi:
pay bill before maturity

Nilesh Kumar:
Contract khtm hona mtlb retirement hona..
1)completion of LC process after customer pays money for import then customer will come to bank and will retire that LC.
2) cancellation of that contract before due date by the buyer of LC/forward contract that is also retirement

You can say it's expiry  of LC

Devil:
Retirement of import bills means... It's related to Bills selling rate..

So we have to bills selling rate  formula
= spot rate +exchange margin for TT selling rate +exchange margin for Bills selling rate..

For we have find Spot rate
=1.2185*68.15
=83.04

And calculate TT selling margin value
 =83.04*0.20/100
=0.166

And we don't Have exchange margin for bills selling rate.. We should neglect it
So
 83.04+0.166=83.206.

Baswaraju Rajesh:
in the above question premium and discount is ignored??

Nilesh Kumar:
Customer(importer) have purchase something from overseas seller,who have given bill in GBP.
Now being an  Indian importer you have to pay in GBP but you only have INR
Then customer coming to you(bank) and ask to remit GBP to that overseas seller on behalf of importer
What you will do ?
You will ask him to purchase dollar because he can't purchase GBP directly in exchange of INR
So he will purchase INR i.e sale txn from bank point

Now he will purchase GBP from dollar
So again bank will sell GBP to him against dollara..again selling txn

So that's why selling rates used. And because it is happening in spot rate so no need for premium

Both are spot rate

Baswaraju Rajesh:
Exporter or importer both are customers na from bank perspective

Nilesh Kumar:
First is for USD/INR
Second is for GBP/ USD
Cross Multiply both and you will get
(USD/INR)*(GBP/USD) = GBP/INR
That is required rate

Yes, but you are not dealing with both.
You are dealing with customer in your country.
Other one have their own banker in that country...so don't get confuse.

Customer comes to you is either exporter or importer..

Just remember
Import bills means sale
Export bills means purchase

Nipen:
BESI

Buy export sell import

Phle din hi ye formula btaya tha😁

SELVARAJ T:
Can a resident continue to maintain an account outside India which was opened by him when he was a non-resident?
1. No, once resident status changed all foreign currency is required to be surrendered
2. Yes, under general permission by RBI
3. Yes, with specific permission from RBI
4. No, not allowed under AML Act 2005

Interest income in which one of the following account is considered taxable and subject to TDS deduction?
1. RFC Account
2. NRE Account
3. FCNR Account
4. None of these

Under which of the following types of bank account, chequebook can’t be issued to customer?
1. NRO Account
2. NRE Account
3. SNRR Account
4. FCNR Account

Co-acceptance of Bill of Exchange is ............. ?
1. Non fund based facility given to exporter
2. Fund based facility to importer
3. Non permissible finance as per directive of RBI
4. Non fund based facility given to importer

EDPMS is an automated system through which intimation of export cleared by Customs Department is passed to AD
Bank, electronically. What for this short form stands for?
1. Exchange Development Portfolio Management System
2. Electronic Delivery and Payment Monitoring System
3. Export Data Processing and Monitoring System
4. Electronic Data Passing and Management System

Export packing credit is generally granted on the basis of value of export order on
1. CIF Basis
2. FOB Basis
3. CFR Basis
4. C & I Basis
Correct Answer : 2

Bill of Entry is evidence of what?
1. Evidence of export of physical goods cleared by the Customs Department to go out of India
2. Evidence of import of physical goods arrived in India and cleared by the Customs Department
3. Evidence of export of software services
4. Evidence of import of services received in India and informed to Customs Department

The packing Credit can be disbursed maximum up to ___% , as per ______?
1. 85% excluding 5% insurance and 10% freight component of CIF Value/ as per FEDAI Rules
2. 100% of CIF Value/ as per RBI Directions
3. 100% of FOB Value/ as per internal credit policy of the bank
4. Any amount within the CIF Value for which insurance cover is obtained/ _as per banking practices in India

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