1 Introduction to Foreign Exchange: 2. Exchange Market, 3.

Exchange Rates and

Types 4.FEMA, FEDAI, FIMMDA
1. The FEDAI was established in 1958 as ____in India.
a) An association of all banks
b) An association of all authorized dealers
c) An association of exporters
d) An association of all importers

2. Under FEMA, all ___ account transactions are free unless specifically restricted.
a) Current
b) Capital
c) Vostro
d) Nostro

3. The responsibility for administering FEMA is vested with the _____.

a) Reserve Bank of India
b) Foreign Exchange Regulation Act
c) Foreign Exchange Dealers Association of India
d) Foreign exchange department in a bank

4. Banks maintain foreign currency accounts known as …………accounts with banks

abroad.
a) Vostro
b) Nostro
c) Loro
d) FEMA

5. The term `loro account’ means _____.

a) Our account with you
b) Your account with us
c) Their account with you
d) Local currrent account

6. The foreign exchange market is considered a 24-hour market because:

a) It is open all through the day
b) All transactions are to be settled within 24 hours
c) At least one market is active at any point of time due to geographic dispersal
d) A minimum of 24 hours must lapse before any transaction is settled

7. The major players in the foreign exchange market are:

a) Commercial banks
b) Corporates
c) Exchange of brokers
d) RBI and the central government

8. Speculation in foreign exchange market refers to:

a) Buying and selling of currencies in large volumes
b) Booking of forward contracts without the intention to execute
c) Buying of selling with a view to make profits from movements in rates
d) Buying or selling with a view to making riskless profits
9. In direct quotation, the unit kept constant is:
a) The local currency
b) The foreign currency
c) The subsidiary currency
d) None of the above

10. Forward margin refers to:

a) The profit on forward contract
b) The commission payable to exchange brokers
c) The difference between spot rate and forward rate
d) None of the above

11. Exchange Margin is added to:

a) Cross rates
b) Base rate for buying
c) Overseas rates
d) RBI rates

12. The difference between the spot rate and the forward rate is known as:
a) Forward margin or swap points
b) Marginal difference
c) Bank margin
d) Market margin

13. In direct quotation, a bank buys foreign currency at ____ price and sells at a ___
price.
a) High, low
b) Low, high
c) Mean, low
d) Average, market

14. Spot rate means settlement:

a) After two working days
b) On the same day
c) After one month
d) Next day

15. When the forward margin is in ascending order it means that the currency is in:
a) Premium
b) Discount
c) Range-bound
d) Out of range

16. Restricted Money changers can

a)Purchase foreign travellers cheques , currency notes and coins
b)Purchase and sell travellers cheques
c)Deal in foreign exchange transactions of all kinds up to a certain limit
d)Deal only in currencies approved by RBI

17. An Authorised Person under FEMA does not include

a)An Exchange Broker
b) An Offshore Banking Unit
C)An authorised Money changer
d) An authorised dealer
 18. A credit in Balance of payments indicates
a)Earning of foreign exchange or incurring liability abroad or decrease in asset
abroad
b)Reduction of bank balance abroad
c)Drain in the foreign exchange of the country
d)Adverse balance of payments

19. Convertibility of a currency is indicated by its

a)Conversion at market rate without any quantitative restriction by government
b)Conversion at official rate
c) Conversion at market rates but subject to quantity restriction by Government
d) Conversion at markets

20. A country has negative balance of trade. It means the balance of payments on
current account
a) May be positive or negative
b) Should also be negative
c) Should be positive
d) Should be the same as balance of trade.

21. FEMA has come into force with effect from

a) June 1, 2000
b) Dec 5,1999
c) May 1, 2000
d) None of the above

22.Rules for conduct of foreign exchange business in India are framed by

a) FEDAI
b) IRDA
c)ISDA
d) SBI

23.Violation of FEMA provisions

a) Is not a criminal offence
b) Is a criminal offence
c) Is an international offence
d)Is a local offence

24.Remittance out of lottery winnings

a)Is a prohibited transaction
b) Is a permitted transaction
c) Is a negotiable transaction
d) Is an authorized transaction

25. Foreign Exchange market is considered 24-hour market because

a)Due to geographic dispersal at least one market is active at any point of time
b) Minimum 24 hours must lapse before any transaction is settled
c)All transactions are to be settled within 24 hours
d) It is open all through the day

26. The net potential gain or loss likely to arise from exchange rate changes is
Exchange risk
Exchange exposure
Profit /loss on foreign exchange
Exchange difference
27. USD 1=63.7525/7550-in this quote by the Bank, 63.7525 indicates Bank`s
a)Buying rate
b)Selling rate
c)Forward rate
d)Tom rate

28.The exchange rates quoted by an Authorized Dealer to its customers are known as
a)Merchant rates
b)Proprietary trading rates
c)Inter-bank rates
d)Market rates

29. The maxim buy low and sell high is applicable for
a. Quotation of pound sterling
b. Indirect rates
c. Direct rates
d)US Dollars

30. In the quotation---

Spot USD 1=Rs. 45.6500/10
500/550
a. Spot dollar is at premium
b. Forward dollar is at premium
c. Forward dollar is at discount
d)Spot dollar is at discount

31. The settlement of deals in the Money market is governed by:

a) FEDAI
b) FEMA
c) FIMMDA
d) FIRRPRIA

32. FEDAI is constituted under:

a) The Societies Act
b) The Companies Act, 1956
c) The RBI Act
d) The SBI Act

33. Brokers are not expected to ____ in deals.

a) Act as agents
b) Act as principals
c) Act as consultants
d) Act as advisors

34. The origin of exchange control can be traced to:

a) 1930s
b) 1970s
c) 1980s
d) 1990s
 35. A transaction which alters the asset or liability position outside India of a person resident
in India ic called……transaction.
a. Current account
b. Capital account
c. Errors & Omissions account
d. None of the above

36. The number of nostro accounts that can be maintained by a bank in a particular
currency is
a. One
b. Not exceeding three
c. Mimimum two
d. No such limit

37. . Under FEMA, the Reserve Bank of India has been authorised to make……….. to carry
out the provisions of the Act.
a. Rules
b. Regulations
c. Both rules and regulations
d. Notifications

38. In direct quotation, the unit kept constant is

a. The local currency
b. The foreign currency
c. The subsidiary currency
d. None of the above

39. The acronym FEDAI stands for

a. Foreign Exchange Dealers’ association of India.
b. Federal export dealers’ association if India
c. Fixed earners” draft
d. Fixed earners draft agreement on interest

40. The foreign exchange Reserve of our country is expressed in………….currency.

a. Rupees
b. US Dollars
c. Euro
d. SDR

41. For an inward remittance in USD received in the name of a customer the following
rate is applied and the rupee equivalent is credited to his account.

A) TT Buying rate
B) TT Selling rate
C) Currency Buying rate
D) Cheque Buying rate

42. The normal transit period prescribed by FEDAI for an export bill payable on demand
is

A) 90 days
B) 25 days
C) 180 days
D) 270 days
 43. In financial market, market makers quote both……..and ……..price
A) Higher and Lower
B) Domestic and Foreign
C) Direct and Indirect
D) Bid and Ask

44. Which among the following is a direct quote?

A) USD 1 = SGD 1.28/30 (New York)
B) Euro 1 = USD 1.35/38 (Hamburg)
C) GBP 1 = INR 82.57/07 (Mumbai)
D) JPY 100 = USD 73/78 (Tokyo)

45. A cheque fro USD 10000 purchased when the exchange rate was USD 1 = INR
54.00/30. The cheque is returned unpaid. You decide to recover the amount on a
particular day when the exchange rate is USD 1 = INR 55.20/50
A) You will recover Rs.540000 and interest due if any
B) You will recover Rs.552000 and interest due if any
C) You will recover Rs.555000 and interest due if any
D) You will recover Rs.54300 and interest due if any

46. Based on the ongoing market rate you have taken USD 1 = INR 55.40 as base rate. You
load 25/30 for arriving at the TT rates. What is the rate you apply for issuance of a DD
for USD 5000
A) INR 55.15
B) INR 55.65
C) INR 55.70
D) INR 55.10

47. The difference between the TT Buying Rate and TC buying rate represents

A) Exchange Commission
B) Spread
C) Profit Margin
D) Interest for the transit period

48.A Full Fledged Money Changer comes under the following category
E) AD Category II
F) AD Category I
G) AD Category III
H) AD Category A

49.If interest rate for USD is 4% p.a. and for INR 8% p.a. which currency will be costlier at a
later date
I) US Dollar
J) Indian Rupees
K) Neither USD nor INR
L) Both currencies will be costlier

50. In case the home currency is weakening it is beneficial to ….

Exporter
Importer
No one
Banker
B. Foreign Exchange Remittances
1. The terms `current account transactions’ and `capital account transactions’ are used in
the context of ______ of a country.
a) Balance of payments
b) Balance of trade
c) Trade surplus
d) Capital adequacy

2. When a remittance of USD 1000 is sent by you to your relative abroad for
maintenance it is classified as:
a) Current account transaction
b) Capital account transaction
c) General remittance
d) Special remittance

3. For remittance of amount towards imports, this form must be submitted to the bank:
a) Form A 2
b) Form A 1
c) BTQ form
d) Form R 1

4. For issuing a demand draft, the bank applies ____ rate.

a) Buying
b) Selling
c) Cross
d) Balancing

5. For inward remittances, General Ledger entries at a bank’s branch in India are made
in:
a) Subsidiary book
b) Mirror account
c) Nominal account
d) Reconciliation account

6. Drawing of Foreign Exchange for the following transaction is prohibited:

a) Investment in shares overseas
b) Purchase of property
c) Remittance for purchase of lottery tickets, banned magazines, foot ball
pools, sweepstakes.
d) Remittance for giving gifts.

7. Under Foreign Currency contribution Regulation act:

a) A person can open many accounts for receiving the foreign contribution.
b) No permission need be obtained for opening the accounts
c) Only single account can be opened and receive contribution in that account.
d) None of the above

8. Under Liberalised Remittance Scheme, all individuals are allowed to remit ----- per
financial year for any permissible current or capital account or a combination of both.
a) Usd.100,000
b) USD.75000
c) USD.250,000
d) USD.125,000
9. Capital Account transaction permitted under LRS:
a) Hold shares or debt instruments or any other assets including property
without permission of RBI.
b) Buy lottery tickets
c) Sweep stakes
d) None of the above

10. The Acronym SWIFT stands for:

a)Society for world wide international transfer
b) Society for world wide Interbank Financial Telecommunication
c) Southern world international financial telecommunication
d) none of the above.

11. Message type MT1xx used for transmitting messages in SWIFT is:
a) Customer payments and cheques
b) Treasury markets
c) Securities
d) Collection and cash letters

12. MT 7xx message type is used in SWIFT for transmitting :

a) Collection and cash letter message
b) Documentary credit and Guarantees
c) Traveller cheques
d) Cash management and customer status.

13. SWIFT is:

a) A member owned co-operative
b) Owned by the ICC
c) Owned by world bank
d) All the above

14. FCRA acronym stands for:

a) Foreign currency regulation act.
b) Foreign currency Reformation act.
c) Foreign contribution Regulation Act.
d) Foreign Contribution Regional Act

15. Under FCRA Drawing of Exchange for the following transaction is prohibited:
a) Travel to Nepal and BHUTAN.
b) Payment related to call back services
c) Remittance of interest income on funds held in Non-resident special rupee
(Account) scheme.
d) All the above

16. As per the guidelines of RBI, the Banks must:

a) Need not Obtain the purpose of every inward remittance.
b) Must obtain purpose of every inward remittance.
c) May or may not obtain the purpose of remittance
d) None of the above.

17. The particulars of inward remittance is to given by:

a) The correspondent Bank in swift message.
b) If it is not given in the message it must be ascertained
c) Can also be obtained from the beneficiary
d) All the above.
 18. A document issued by ADs showing receipt of Foreign Inward Remittance by a
resident is

A) BRC
B) CDF
C) FIRC
D) Form-A
E)
19. RTGS arrangement does not ensure the following

A) Immediate transfer of funds

B) Payment instructions are processed and settled transaction by transaction
C) Compliance of KYC Norms fully
D) Electronic based settlement

20. Mirror revaluation rates are provided by..

A) RBI
B) SEBI
C) DGFT
D)FEDAI

21. SWIFT fulfills the following functions

A) A method of fast transportation for perishable commodities

B) A method of quick settlement of trade receivables
C) Transmission of authentic messages including payments & receipts
D) Is a loan product that ensures quick release of funds

22. FIMMDA stands for

A) Financial Intermediaries and Money Market Dealers Association

B) Funding Instrument and Money Market Derivatives Association
C) Fixed Income Money Market & Derivatives Association
d)Fund Income Money &Mutual Association

23. As per FEMA the purchase and sale of foreign Exchange can be undertaken only by
a) Authorised Persons
b) Gove of India Banks
c) State Bank of India
d) Foreign Banks

. 24. FEMA contains Sections.

a. 49
b. 48
c. 50
d. 27

NON RESIDENT ACCOUNTS:

1. Term deposits can be opened in:
a) NRO account
b) NRE account
c) FCNRB account
d) All the above
2. A foreign national is of Indian origin if:
a) Both his parents were born in India
b) Both his parents are foreign nationals having immovable property in India
c) Any one of his parents or grandparents was an Indian national
d) None of the above

3. Non-resident (external) account can be opened by:

a) Individuals only
b) Individuals as well as organizations
c) Societies and clubs which do not deal in profit-making business
d) Individuals and societies which do not deal in profit-making business

4. A joint account of a non-resident with a resident accountholder is allowed in:

a) Non-resident (external) accounts
b) Non-resident (ordinary) accounts
c) Non-resident(ordinary) accounts only in the case of term deposits
d) Foreign currency non-resident deposits

5. An existing account of a resident who goes abroad for gainful employment and for an
uncertain period will be referred to as:
a) Blocked account
b) Non-resident (ordinary) account
c) Non-resident(external) account
d) Resident account

6. FCNR (B) accounts can be opened for a maximum period of:

a) Ten years
b) Three years
c) Five years
d) To limit

7. The exchange risk under FCNRB account is borne by:

a) The bank maintaining the account
b) The depositor
c) The RBI
d) None, since there is no exchange risk

8. The minimum period for which FCNR (B) account can be opened is:
a) 46 days
b) 90 days
c) Six months
d) One year

9. An FCNR B account is opened for EUR 50000. On maturity the deposit is repayable
in:
a) Euro only
b) Euro or US dollar only
c) US dollar only
d) Any currency as desired by the depositor

10. The nominee under a non-resident account:

a) Should be a resident Indian
b) Should be related to the depositor
c) Can be a resident or non-resident
d) Should be an accountholder with the bank
11.Mr.Srinivasan is an NRI working in Dubai. He has let out his house in Bangalore on a
monthly rent of Rs. 25000. He is having an NRE account in your branch and he wants the
rent amount received to be credit to the said account. You will

A) You will refuse to credit

B) You will ask him to open a new account for crediting the amount
C) This can be credited only to his NRO account
D) You will accede to his request

12. NRE Account can be opened jointly with:

A) An NRI only
B) With resident relative also
C) Joint Account not permitted
D) With spouse only

13. Mr. Govind an NRI residing in USA is remitting USD 10000 for credit of his wife’s resident
account and this is known as..
A) Capital Transaction
B) Current Account Transaction
C) Official Reserve Transaction
D) FDI

14. A person born in India who opts for a foreign citizenship is called..
A) NRI
B) Foreign National
C) PIO
D) None of the above

15. This is not one of the features of an NRE account

A) Interest earned in the account is not subject to TDS
B) Funds held in the account is free from wealth tax
C) The account can be held jointly with a resident friend
D) Funds held in the account can be invested in CDs

16. Payment interest in case of following account compounded once in 180 days basis
A) Recurring Deposit
B) FCNR Deposit
C) EEFC Account
D) RFC(D) Account

17. Remittance received from abroad for credit of NRE account is a..
A) Capital Account Transaction
B) SB Account Transaction
C) Current Account Transaction
D) Official Reserve Account

18. A nonresident having an NRE SB account with you approaches you with a request to
credit Rs. 15000 every month he will be receiving from his earlier employer in India as
pension for his past services. You wil…
A) Refuse to credit the amount
B) Will agree and credit the pension amount as requested
C) Credit only if he opens a separate account NRO
D) Take RBI permission
19. The rate of interest payable on the following type of deposit is LIBOR linked

A) NRE Account
B) FCNR Account
C) NRO Account
D) EEFC Account

20. The maximum period for which a FCNR deposit can be accepted is

A) 5 Years
B) 3 Years
C) 10 Years
D) I year only

21. RBI has permitted non -residents Indians to open foreign currency account in India
called as
a. FCNR
b. NRO
c. EEFC
D RFC

22. NRO account stands for

A) Non Resident Ordinary
B) Non Resident Occasional
C) Non Remittance Ordinary
D) Non Resident Ordinal

23. All transactions undertaken by a resident that do not alter his / her assets or
liabilities, including contingent liabilities, outside India are
A) Current account transactions
B) Capital Account transactions
C) Containment transactions
D) Foreign currency exchangeable bonds

24. LRS stands for

a) Liberalised Remittance Scheme
b) Liberalised regularization scheme
c) Loro reconciliation statistics
d) Localised remittance scheme

25. FCNR is always opened as

a) Savings account
b) Current account
c) Deposit account
d) Mutual fund

26. . Which of the following type of accounts can be opened under EEFC accounts
a) FCNR
b) Recurring deposit
c) Savings account
d) Current account
27. The nominee under a non-resident account:
e) Should be a resident Indian
f) Should be related to the depositor
g) Can be a resident or non-resident
h) Should be an accountholder with the bank

28. The balance in RFC account can be used:

a) Only for payments outside India
b) Only for payments within India
c) For any purpose including investment outside India
d) For any purpose other than investment in India

29.An RFC (Domestic) account can be opened by:

a) Resident individuals
b) Any resident, including corporate bodies
c) Foreigner on a temporary visit to India
d) Residents going abroad for temporary visit

30.An RFC (Domestic) account cannot be credited with foreign exchange in the form of
currency notes, bank notes and travelers cheques acquired as:
a) Business/service earnings/gifts abroad
b) Business/service earnings/gifts in India from a visitor from abroad
c) Earlier from authorized dealer for travel abroad and remains unspent
d) Exchange for rupees from a foreign visitor to India

31.Investment by non-resident Indians on non-repatriation basis cannot be made in:

a) Nidhis and chit funds
b) Plantation activities
c) Real estate
d) All the above

32.A move towards making rupee fully convertible is:

a) RFC (Domestic) account
b) RFC account
c) FCNR account
d) NRO account

33. Payment of customs duty is:

a) Permissible from EEFC account
b) Not permitted from EEFC
c) After conversion of EEFC balance to INR
d) After getting permission from RBI

34.The RBI Master circular:

a) Permits joint names in EEFC on former or survivor basis
b) Does not permit joint names in EEFC
c) Permits joint holder as NRI only
d) Permits joint holders on either or survivor basis

35.The EEFC is a source for:

a) NRE deposits
b) CASA deposits
c) NRO deposits
d) RFC (Domestic) deposits
36.Transactions costs are _____ by EEFC accounts.
a) Increased
b) Reduced
c) Multiplied
d) Affected adversely

37. An EEFC account will always be:

a) In USD
b) In INR
c) In any convertible currency
d) In cross currency

38.An ex NRI can park his foreign currency in the following type of account and can earn
interest also

A) RFC(D)
B) RFC
C) EEFC
D) FCNR

RISK Analysis, Basel Norms, RBI directives on Risk Management

1. VaR is an estimate of ______ loss for a given period at a given confidence level.
a) Certain
b) Potential
c) Provisional
d) Partial

2. VaR can be calculated for_____ period as desired

a) Any
b) One month
c) Six month
d) Long

3. The ___ of the bank decides on the deposit rates.

a) Credit department
b) Development department
c) ALCO
d) Accounts department

4. Ideally deposit rates should be ____ the money market rates.

a) At or less than
b) More than
c) Twice
d) Half of

5. A customer tenders a cheque for USD 10000. He requests the bank to purchase the
same. The system fails to take the transactions into position. This is an example of
______ risk.
a) Market risk
b) Interest rate risk
c) Operational risk
d) Legal risk
 6. LCR is an abbreviation for ____.
a) Long term coverage ration
b) Liquidity coverage ratio
c) Low coverage ratio
d) Level coverage ratio

7. The stock of liquid assets should enable the Bank to survive until Day ___ of the
stress scenario.
a) 30
b) 10
c) 15
d) 21

8. Revaluation reserves will form part of _____ capital.

a) Market risk
b) Credit risk
c) Tier I
d) Tier II

9. Perpetual Non-cumulative Preference Shares (PNCPS) is an element of ____.

a) Credit risk
b) Market risk
c) Tier II Capital
d) Tier I capital

10. Failure of which Bank resulted in the formation of Basel Committee?

a) Daiwa Bank
b) BCCI
c) Sumitomo Bank
d) Bank Herstatt

Introduction to Treasury, Structure of Treasury Front, Mid office and Back office,
Banking and Trading Book, Investment of Domestic treasury, Ethics and code of
conduct of Dealers, Domestic Treasury Instruments, REPO,

1. Treasury liabilities are created out of ____.

a) Customer deposits
b) Market borrowings
c) Reserve funds
d) Capital funds

2. One objective of the treasury is to fund the bank’s balance sheet ____ as possible.
a) As cheaply
b) As quickly
c) As costly
d) As slowly

3. ALCO is an abbreviated from for:

a) Assets and Logistics Committee
b) Approved :Liability Committee
c) Approved Local Committee
d) Asset and Liability Committee
 4. FRA is an abbreviated form for:
a) Forward Rate Agreement
b) Fixed Rate Agreement
c) Final Rate Agreement
d) Floating Rate Agreement

5. SLR bonds are classified under:

a) Treasury liabilities
b) Treasury Assets
c) Treasury contra liabilities
d) Treasury

6. The dealing room is the bank’s ____ with international and domestic financial markets.
a) Interface
b) Front office
c) Group of dealers
d) Merchant cover

7.Significant authority is given to ____dealers to commit the bank to the market.

a) Dealers
b) General Manager
c) Reuters
d) Finance Minister

8.Sources such as ____ give market information on a real-time basis.

a) Reuters
b) Newspapers
c) Dealers
d) Proprietary dealers

9.Conversations in the front office are ___.

a) Recorded
b) Reported
c) Not recorded
d) Not reported

10.KYC in the context of the treasury front office in the dealing room is an abbreviation for _.
a) Know Your Counter-Party
b) Know Your Customer
c) Know Your Currency
d) Know Your Conversion Rate

11. A bank’s open currency position in individual currencies is the main source of ____.
a) Forex risk
b) VaR
c) Hedging strategies
d) Cash flow

12. ___ portfolio need not be marked ‘To market’.

a) HTM
b) AFS
c) HFT
d) VaR
 13. The middle office of the treasury calculates and prepares a ____ report.
a) VaR
b) ALCO
c) Risk
d) Cross-currency

14. Evolving hedging strategies for assets and liabilities are done by being part of the
____ meeting.
a) ALCO
b) MMTC
c) STC
d) VaR

15. The mid office recommends enhancement in ____.

a) Stop loss limit
b) Risk
c) Rate scan
d) Cross-currency positions

16. For General ledger purposes we use ____ account of nostro.

a) Vostro
b) Mirror
c) Bank
d) RBI

17. A ___ account is necessary to receive and pay foreign currency funds.
a) Mirror
b) Bank branch
c) Nostro
d) Rate scan

18. _____ messages are structured messages.

a) Nostro
b) SWIFT
c) Rate scan
d) CCIL

19. Our bank’s RTGS account with RBI shows ____ balance at the end of any day.
a) Zero
b) Nostro
c) Vostro
d) Maximum

20. CBLO is a product of _____.

a) STP
b) CCIL
c) Forwards
d) FEDAI

21. Classification of investment portfolio is necessary for _____ and valuation purposes.
e) Internal
f) Profit accounting
g) External
h) Reporting to FEDAI
22. All investments in the HTM category will be valued at ____ cost.
e) Acquisition
f) Translation
g) Carrying
h) Market

23. Investment and trading activities of banks in bonds should conform to the regulations
issued by _____.
e) FEMA
f) FEDAI
g) RBI
h) FIMMDA

24. HTM should not exceed ____ percent of the investments.

e) 25
f) 50
g) 10
h) 20

25. The _____ portfolio need not be marked-to-market.

a) Non-SLR
b) HTM
c) Available for Sale
d) Trading operations

26. Classification of securities is necessary for _____.

i) Sorting
j) Valuation
k) CRR
l) SLR

27. The HFT category ________.

i) Needs to be marked to market
j) Need not be marked to market
k) Is not market related
l) Is not impacted by market

28. The AFS category

i) Need not be marked to market
j) Can be converted to HFT
k) Needs to be marked to market
l) Can be converted to HTM

29. Holding period prescriptions regarding the holding period applies to ______.
i) HFT
j) Other than HFT
k) Only AFS
l) Only to HTM

30. Capital adequacy norms of the Basel Committee _______.

e) Apply to the Balance Sheet
f) Apply to market risk in the Trading book
g) Exempt Trading book
h) Apply to the assets and liabilities of the bank
1. The placement of money lending in the call/notice money market is _____.
a) Secured
b) Unsecured
c) Regulated by CCIL
d) Regulate by SBI

2. The CCIL provides the dealing system through ____ a closed user group to the
members of the Negotiated Dealing System (NDS).
a) INFINET
b) STP
c) SGL
d) WAN

3. The relationship between the price and yield to maturity is ____.

a) Perverse
b) Direct
c) Inverse
d) Cordial

4. Which of the following are the eligible securities in CBLO?

a) Central Government securities including Treasury Bills
b) CDs
c) CPs
d) NSCs

5. The maximum participation in IBPC can be only ____% of t percent amount

outstanding or the limit sanctioned, whichever is lower.
a) 30
b) 40
c) 50
d) 75
31. A repo transaction includes:
m) A spot sale and a forward sale
n) A spot sale and a forward purchase
o) A spot purchase and a forward purchase
p) A forward sale and option purchase

32. In the money market, a repo transaction is _____.

m) Collateralized guarantee
n) Collateralized bid
o) Collateralized offer
p) Collateralized lending

33. Repos are _____ term instruments.

m) long
n) medium
o) short
p) very long

34. In repo transaction, the lender could be exposed to ____ risk.

m) Interest rate
n) Exchange rate
o) NPA
p) Loss asset
35. For corporates, repos provide a source of _____.
i) Complex borrowing
j) Expensive finance
k) Inexpensive finance
l) Easy finance

36. Identify a statement among the following which is not true ..

A) Risk management is not the functions to be carried out by front office

B) Back office submits statutory return to RBI
C) Deals are concluded by Back office
D) VaR is calculated by Back Office

37. Discount & Finance House of India undertakes

A) Credit Rating functions

B) Dispute Resolution
C) Rediscounting of money market instruments
D) Promoting trade & investments

38. Return on Investments are known as

A) Yield
B) Interest
C) Dividend
D) Brokerage

39. This is a form of arbitrage in which the bank exploits anomalies in market process

B) Relative Value
C) Investment
D) Arbitrage
E) Swap

40. SLR and CRR are maintained by banks to ensure

A) Market stabilization
B) Avoidance of credit Risk
C) Liquidity
D) Compliance of RBI regulation

41. Banks buying assets for the purpose of selling on the same day when prices go up is
known as
A) Arbitrage
B) Swap
C) Trading
D) Dealing

42. Banks can park their surplus funds in the following arrangement

A) Repo
B) By issuing its on Capital Bond
C) Reverse Repo
D) By issuing CDs
43. The rate of interest offered when extending refinance by RBI to banks is

A) Base Rate
B) BPLR
C) Repo Rate
D) Bank Rate

44. This is an organization through which Treasury Trade settlements are undertaken
A) FEDAI
B) SEBI
C) RBI
D) CCIL

45. The following is not one of the demand liabilities taken into account for the purpose of
calculating CRR

A) Current Deposit
B) Overdue FDs
C) DDs unpaid
D) RD account where few installments are due

46. Banks are required to maintain CRR in terms of following provisions

A) Section 24(2A) of B R Act

B) Section 10 of Negotiable Instrument Act 1882
C) Section 42 of RBI Act 1934
D) None of the above

47. The term government securities does not include

A) Central Government Securities

B) Certificate of Deposits
C) State Government Securities
D) Treasury Bills

48. Certificate of Deposits are issued by banks for a period of

A) One month to twelve months

B) I day to 14 days
C) 7 days to One year
D) 1 year to 3 years

49. Which among the following is not true with regard to Commercial Paper (CPs)

A) It is unsecured money market instrument

B) Issued in the form of Bills of Exchange
C) Primary Dealers are also permitted to issue CPs
D) CPs may be held by individuals

50. Treasury Bills are issued for the following tenures

A) 7 days to 364 days

B) For 91 days only
C) For 14 days, 28 days, 91 days 182 days and 364 days
D) For one year only
 51. The rate of interest will be low in call money market when

A) Market is liquid
B) Market is tight
C) Market is volatile
D) Market is unstable

52. To ensure that banks do not take risks beyond their risk taking capacity the following
is required to be maintained

A) Margin
B) Collateral
C) Capital Adequacy
D) Guarantee
53. The price differential between different markets of the same asset give rise to

A) Speculation
B) Swap
C) Arbitrage
D) Investment

54. This is a type of money market instrument where the borrower has to repay funds
when called upon to do so by the lender.

A) Notice Money
B) Call Money
C) CDs
D) PCs

55. Interest payable on bond is made known as

A) Bank Rate
B) Fixed rate
C) Coupon Rate
D) Floating Rate

56. Which among the following is a capital market instrument ?

A) T-Bills
B) CDS
C) Call Money
D) Equity Shares

57. Find out the incorrect statement among the following

A) Fixed income securities are also known as Bonds

B) Money market instruments are settled over the counter
C) Call Rates are market driven
D) There are no regulatory limits for call money borrowing and lending

58. A market wherein long-term loans are raised is known as..

A) Money Market
B) Stock Market
C) Forex Market
D) Capital Market
 59. Firms buying Government securities directly from a Government for reselling to
others are...

A) Brokers
B) Dealers
C) Primary Dealers
D) Ads

60. The interest rate at which banks can avail refinance from RBI is

A) Base Rate
B) Prime Rate
C) Bank Rate
D) Repo Rate

61. Which among the following statement is true

A) To enable price discovery, cap on call money interest rate is fixed

B) Mutual Funds cannot participate in call money operations
C) Profit making is not one of the objectives of a treasury
D) Spread between money market asset and liability is a source of profit of treasury

62. A Demand Draft drawn by Bank of America on SBI, Bangalore for USD 10000 if
tendered to you by the payee who is having account in your branch you will apply the
following exchange rate and credit the rupee equivalent to his account

E) TT Buying rate
F) TT Selling rate
G) No rate will be applied; you send the DD to SBI
H) Currency buying rate

63. Which of the following function is NOT undertaken by a Front Office ?

A) Risk Taking
B) Settlement for the deals concluded
C) Quoting Exchange Rates
D) Manage Investment

64. An instrument the tenure of which is less than one year is

A) Capital Market Instrument.

B) A Trade Bill of Exchange
C) A co-acceptance
D) Money Market Instrument

65. Which among the following is a current liability to the bank ?

A) Unexpired Fixed Deposit

B) A housing loan
C) Credit balance in an overdraft account
D) A non-performing asset
 66. One among the following is not an approved asset which qualifies for including in
SLR

A) Cash held in the branches

B) Investment in stock market securities
C) Cash held in the currency chest maintained by the bank on behalf of RBI
D) Gold

67. Exchange control authority in India is:

A) IRDA
B) ECGC
C) RBI
D) FEDAI

68. The liability shown below is not taken into account while computing CRR

E) Recurring Deposit
F) Overdue FDs
G) Refinance obtained from RBI
H) Credit balance in Overdraft Account
69. RBI can increase the SLR requirement not exceeding……..of DTL

A) 25%
B) 23%
C) 40%
D) Cannot increase

70. Identify a statement among the following which is not true

A) Government borrows fund to finance fiscal deficit

B) CRR to be maintained on daily basis is 70% of the total requirement
C) No interest is paid by RBI on CRR balances at present
D) Government securities does not include Treasury Bills

71. The effective cost of SLR is ascertained by

A) Referring to Bank Rate published by RBI

B) Repo and reverse Repo rate
C) Current yield on SLR investments
D) Current yield minus cost of deposits

72. One of the tools used by RBI for Monetary Control is

A) Publishing inflation rate
B) Decontrolling of interest rates
C) Effecting change in CRR to be maintained by banks
D) Intensifying audit measures

73. This is an institution set up for arranging guaranteed settlement for trades concluded by
the treasury

A) SEBI
B) FEDAI
C) DFHI
D) CCIL
74. The acronym CBLO stands for

A) Clearing and balancing of Liability Operation

B) Collaterised Borrowing and Lending Operations
C) Capital Build & Liability Organisation
D) Central Borrowing & Lending Operations

75. RTGS arrangement does not ensure the following

E) Immediate transfer of funds

F) Payment instructions are processed and settled transaction by transaction
G) Compliance of KYC Norms fully
H)Electronic based settlement

76. A treasury which undertake both domestic as well as forex operations at one place is
known as

A) Corporate Treasury
B) Forex Treasury
C) Integrated Treasury
D) None of the above

77. The price ……………..between different markets for the same asset category give rise
to arbitrage

A) Ranging
B) Differential
C) for future
D) paid out

78. An export bill for USD 60000 purchased is returned unpaid. Bank will recover the
rupee equivalent calculated by applying the following exchange rate

A) Bill Buying Rate

B) TT Selling Rate
C) Bill Selling rate
D) No rate applied; only the rupee amount initially given is recovered with interest for
the overdue period

79. Banks can borrow in call money market not exceeding

A) 125% of their Tier 1 and Tier 2 capital previous year
B) 25% of their Tier 1 and Tier 2 capital previous year
C) 100% of their Tier 1 and Tier 2 capital previous year
D) 50% of their Tier 1 and Tier 2 capital previous year
80. CRR and SLR to be maintained respectively at present are….

E) 25% and 5%
F) 21.5% and 4%
G) 30% and 5%
H) 20% and 3%
81. Identify a statement which is not True

A) Risk management is not the functions to be carried out by front office

B) Back office submits statutory return to RBI
C) Deals are concluded by Back office
D) VaR is calculated by Back Office

82. Rediscounting of money market instruments are undertaken by

E) Discount & Finance House of India

F) FEDAI
G) SEBI
H) Delivery versus Payment system

83. Buying a corporate bond yielding 7% and maturing in three years, financed by
deposits costing 6% is the following type of source of profit of treasury

A) Investment
E) Spread
F) Arbitrage
G) Relative value

84. This is a form of arbitrage in which the bank exploits anomalies in market process

F) Relative Value
G) Investment
H) Arbitrage
I) Swap

85. SLR and CRR are maintained by banks to ensure

I) Market stabilization
J) Avoidance of credit Risk
K) Liquidity
L) Compliance of RBI regulation

86. Bank buying assets for the purpose of selling on the same day when prices go up is
known as

I) Arbitrage
J) Swap
K) Trading
L) Dealing

87. Banks can park their surplus funds in the following instrument
E) Repo
F) By issuing its on Capital Bond
G) Reverse Repo
H) By issuing CDs

88. The rate interest offered when extending refinance by RBI to banks is
E) Base Rate
F) BPLR
G) Repo Rate
H) Bank Rate
 89. Two central depositories who maintain stocks in electronic form. They are..
A) National Stock Exchange and Bombay Stock Exchange
B) SEBI & RBI
C) NSDL & CDSL
D) SHCIL & CCIL

90. One among the statements given below is incorrect with regard to Certificate of
Deposit. Please identify

A) CDs can be issued to individuals

B) While physical CDs are freely transferable, Demat CDs cannot be transferred
C) Minimum period has to be in excess of 7 days
D) The rate of interest on the CD is payable on simple interest basis.

91. Under Inter-Bank Participation Certificate the maximum participation in loan would be ..
A) 90%
B) 100%
C) 85%
D) 40%

92. Identify a statement which is not true among the following

A) Generally, the repo rate is lower than that offered on interbank borrowing
B) Repo is not an instrument available in the money market
C) Repo provides loan against securities sold on a repurchase agreement
D) Repo is not allowed in PSU bonds

93. The yield on securities if it is held till redemption is called

A) Nominal yield
B) Current yield
C) Yield to Maturity
D) Holding period yield

94. Those who buy Government Bonds directly from Government authorities for the
purpose of resale to others are known as..

A) Authorised Dealers
B) Primary Dealers
C) Brokers
D) Agents
95. Which statement among the following is not true with regard to CCIL operations

A) It takes the responsibility for delivery, making and receiving payments to and from the
counter parties
B) It has introduced a dealing and Trading platform for Forex operations
C) It applies the concept of novation
D) It arrangers unsecured loans to the members

96. Treasury obtains information such as on- going market rate on real time basis from..

A) RBI
B) Head Office
C) Brokers
D) Reuters and Bloomberg
97. The exercise of marking open position to market is done for..

A) As required by RBI
B) MIS Purpose
C) Assessing gain or loss
D) Ascertaining the volume of business transacted

98. Submission of report under MIS system is the function to be carried out by..

A) Front office
B) Mid Office
C) Back Office
D) Alco

99. Certificate of Deposit issued by the bank is

A) An asset item
B) A liability item
C) Contingent liability
D) Corporate Trade
100. The following liability is excluded for the purpose of calculating CRR…

A) Overdue FDs
B) RD accounts where monthly installments are in arrears
C) Balance held in current account opened in the name of Proprietorship concern
D) Paid up capital and reserve

101. Banks are required to maintain SLR in terms of the following provisions

E) Section 42 of RBI Act 1934

F) Section 24(2A) of Banking Regulation Act 1949
G) Section 10 of Negotiable Instrument Act 1882
H) None of the above

102. This is an institution set up to clear trades among market players on a

guaranteed basis

E) IDA
F) ICC
G) SEBI
H) CCIL

103. The following is not one of the objectives of integrated treasury

E) To act as a centre of arbitrage and hedging activities

F) Improve profitability
G) To ensure decentralization
H) Efficient utilization of funds

104. An investor who is optimistic about the future market is ….

E) Bearish
F) Bullish
G) Piggish
H) Pessimistic
 105. One among the statement shown below is incorrect. Please identify

A) Risk management is not the functions to be carried out by front office

B) Back office submits statutory return to RBI
C) Deals are not concluded by Back office
D) VaR is calculated by Mid Office
106. Yield is normally is derived from

A) Return on Investments
B) Interest rate differential
C) Dividend
D) Brokerage

107. This is a source of income for a treasury earned by exploiting anomalies in

market process

B) Relative Value
C) Investment
D) Arbitrage
E) Swap

108. The primary objective of insisting that banks should maintain SLR and CRR is
to ensure

A) Market stabilization
B) Avoidance of credit Risk
C) Liquidity
D) Compliance of RBI regulation

109. Risk taking is one of the functions to be carried out by…

A) Mid Office
B) Back office
C) Front Office
D) None of the above

115.Money market is market for

Securities of short term nature
Securities of long term nature
Securities made in cash
Exchange of foreign currencies

116.Derivatives are basically..

Financial products for hedging risk
Instruments used for speculation
Negotiable instruments
For lending and borrowing money

117.Which among the following is a treasury asset for the investor?

Certificate of Deposit
Cash with RBI
Fixed assets of the bank
Bills purchased & discounted
118.Treasury front Office handles following functions
Dealing and risk taking
Customer service
Risk Management
MIS, Reconciliation

119.Borrowing by banks in call money should not exceed on an average ……….% of banks
Tier 1 and 2 capital..
100 %
125%
25%
50%

FORWARD CONTRACTS BOOKING, CANCELLATION, EXTENSION, EXCHANGE

ARITHMETIC
1. OTC derivatives are ____.
a) Future products
b) Dealt through exchange only
c) Customized products
d) Non-standard products

2. An option forward contract is also known as _____.

a) Exchange product
b) Swap
c) Future contract
d) Option contract

3. Under an option forward contract, the option of choosing the delivery date within the
option period rests with the _____.
a) Customer
b) Bank
c) RBI
d) SEBI

4. Forward contracts must state _____.

a) Only the first date of delivery
b) The first and last dates of delivery
c) Only the month of delivery
d) Only the year of delivery

5. The transaction of booking a forward contract is initiated by the ____.

a) Broker
b) Exchange
c) Bank
d) Customer

6.In case of delivery subsequent to automatic cancellation of forward contract the rate
applicable is the ______.
e) Originally contracted rate
f) Rate on the date of cancellation
g) Current rate prevailing on such delivery
h) Rate at which cancellation was done
7.One of the charges which arises due to cancellation is ____.
e) Fees
f) Commitment charge
g) Commission on outlay of funds
h) Swap loss

8.A forward purchase contract is cancelled by ____ deal with the customer to mature on
the due date of the original contract
e) An opposite
f) similar
g) option
h) cancelling

9.A forward contract remaining overdue shall on the 15 th day from the date of maturity be
automatically cancelled in terms of rule No. ……. of FEDAI
a) 7
b) 8
c) 6
d) 5

10. Request for cancellation of forward contract can be made by a customer

a) only after the due date
b) only on the maturity date
c) only a week before maturity date
d) on or before the maturity of the forward contract

11. Postponement of date of delivery under a forward contract ____.

i) Makes it an overdue contract
j) Leads to early cancellation
k) Is extension of forward contract
l) Is a reversal of the contract

12. Loading of exchange margins is stipulated by ___.

i) FEMA
j) RBI
k) SEBI
l) FEDAI

13. On the due date an importer (customer) may seek extension of ___.
i) Forward sale contract
j) Forward purchase contract
k) Forward contra contract
l) Futures contract

14. When a customer seeks extension of a forward exchange contract before the due
date, it is known as _____.
a) Early cancellation
b) Early extension
c) Early rollover
d) Early renewal
15. Cancellation and re-booking are the features of _____.
a) Futures contract
b) Spot transaction
c) Tom transaction
d) Extension of forward contract
16.Buying rate for ready merchant rate is derived from _____.
a) Inter-bank spot buying rate
b) Inter-bank ready buying rate
c) Inter-bank spot selling rate
d) Inter-bank ready selling rate

17.An inter-bank quotation is a _______.

a) Two-way quotation
b) Specific rate given
c) Selling rate
d) Buying rate

18.Normal Transit Period is for ____.

a) 20 days
b) 25 days
c) 15 days
d) 7 days

19.The exchange margin is prescribed by the _______.

a) FEDAI
b) Bank
c) FEMA
d) RBI

20.. The term `notional due date’ refers to _____.

a) The date on which an export bill is likely to be paid
b) The due date arrived at without considering the holidays
c) The due date of an import bill
d) The due date of an overdue bill

21.In foreign exchange transactions the following exchange rate is the best buying rate for
the customer
TT Buying Rate
Bill Buying Rate
Currency Buying Rate
T C Buying Rate

22.When assets purchased for the purpose of selling on the same day when prices go up is
called
Trading
Dealing
Arbitrage
Swap

23.Banks are required to maintain SLR in terms of the following provisions

Section 24(2A) of Banking Regulation Act 1949
Section 42 of RBI Act 1934
Section 10 of Negotiable Instrument Act 1882
None of the above
24.An usance bill of 90 days for Rs.100 is discounted at 12% interest p.a. Calculate the
annualized yield thereon
12.37%
12 %
3%
3.09%
25.CHF Stands for ….
Swiss Francs
Chinese Finance
African Rand
Yuan

26. If USD/INR = 62.5000 (Direct Quote) what will be the indirect quote (INR/USD)?
Rs.100 = USD 1.6000
Rs.100 = USD 1.6200
Rs.100 = USD 1.6250
I USD = INR 62.6500

27. For a lender a Certificate of Deposit issued by other bank is

An Asset item
A liability item
Contingent liability
A security offered

28. Treasury Bills are issued for a maximum period of ….

364 days
91 days
182 Days
14 days

29.This is one of the measures initiated by RBI to widen the money market operations
Setting up of DHFI
Fixing limit for inter-bank transactions
Giving interest on CRR
Restrictions on Treasury operation

30.Which among the following statement is incorrect

RTGS system has been launched by SEBI
More than 90% of the inter-bank transfer are settled through RTGS
RTGS is a system of transferring funds on an immediate basis
Transactions are settled individually without netting debits against credits

Additions:
1. A currency commanding premium against another currency will be ……..at a later date
A) Costlier
B) Cheaper
C) Available at same rate
D) D)Volatile
2. Following function is carried out by Discount & Finance House of India
I) Credit Rating functions
J) Dispute Resolution
K) Rediscounting of money market instruments
l)Promoting trade & investments

3. This is a form of arbitrage in which the bank exploits anomalies in market process

J) Relative Value
K) Investment
L) Arbitrage
M) Swap
4. Treasury buying assets for the purpose of selling on the same day when prices go up is
known as

M) Arbitrage
N) Swap
O) Trading
P)Dealing

22. 5. In a Call Option if the strike price is lower than the spot price of underlying asset you
will be..

A) At-the –money
B) In-the-money
C) Out-of-the-money
D) None of the above
23. 6. IDBI Bank VISA World Currency Card is available in

A) US Dollar only
B) Eight foreign currencies
C) USD and GBP only
D) Rupees only

24. 7. You have opened an FCNR account for USD 100,000 for 3 years at 3 % interest per
annum; After 6 months you are requested to close the deposit before maturity. You will …

A) Pay interest applicable for six month without penal cut

B) Pay 2% simple interest
C) Pay at LIBOR for six months
D) Not pay any interest

25. 8. This is a self-regulatory body

A) SEBI
B) CCIL
C) FEDAI
D) ECGC

26. 9. Record of corresponding entries in respect of transactions taking place in the Nostro
accounts are maintained by the bank in ..

A) Escrow Account
B) Vostro Account
C) Mirror Account
D) Current Account

27. 10. For the purpose of showing the rupee equivalent of the FCNR deposit accepted by
the bank the following rate is applied

A) Buying Rate
B) Selling Rate
C) Notional Rate
D) No Rate
28. 11. A derivative product which gives the buyer the right, but no obligation is called..

A) Futures
B) Options
C) Forwards

Swap

29. In case of an export bill drawn under LC where simultaneous reimbursement is available
from a bank abroad the NTP stipulated by FEDAI for such transactions is..

A) 5 days
B) 7 days
C) 25 days
D) 20 days

30. The maximum amount that can be released in currency notes to a resident going to
Dubai on a private visit is …

A) USD 10000 or its equivalent

B) USD 3000 or its equivalent
C) USD 5000 or its equivalent
D) No limit

32. Identify among the following an indirect quote

A) INR 100 = SGD 2.50/55 (Singapore)

B) GBP1 = USD 1.70/75 (New York)
C) EUR 1 = USD 1.30/35 (Frankfurt)
D) USD 1 = JPY 70/75 (Tokyo)

33. Which among the following comes under market risk …

A) Buyer becoming bankrupt
B) Fall in stock market price
C) Government banning imports
D) Goods lost in transit

34 The main objective of capital adequacy norm is to ensure the following..

A) Banks should not lend unscrupulous borrowers

B) To curtail unhealthy competition amongst bankers
C) To prevent banks from taking risks beyond their risk taking capacity
D) To enable more players to commence banking business

35.The difference between a cheque buying rate and TC buying rate represents...
E) Interest for the transit period
F) Spread between buying and selling rate
G) Forward premium
H) Swap point

36. Funds would be easily available when….

A) Money market conditions are tight
B) Market is highly liquid
C) Market is flat
D) There is no competition
37. One country depending on another country what they require will lead to .....

E) Competition
F) Monopoly
G) International Trade
H) Inflation

38.Deal slip verification is done by

P) Front Office
Q) Mid office
R) Back office
S) Head office
39. Which of the following function is NOT undertaken by a Front Office ?

E) Risk Taking
F) Monitoring exposure limits
G) Quoting Exchange Rates
H) Manage Investment

40. An instrument the tenure of which is one year and above

E) Capital Market Instrument.

F) A Trade Bill of Exchange
G) A co-acceptance
H) Money Market Instrument

41. The detailed record of all economic transactions between a country and the rest of the
world is called

I) Balance of Payments
J) Balance of Trade
K) National Income
L) Gross National Product
42. Which among the following is a current liability to the bank for the purpose of NTDL?

E) SB account overdrawn
F) Interbank borrowing
G) Credit balance in an overdraft account
H) Borrowal through Repo

43. An NRE account holder wants you to credit rent received from a house in India to his
NRE SB account. You will
A) Refuse to do so
B) Take RBI permission
C) Can be credited only to his NRO account
D) Credit as requested if he does not have NRO account

44. India Remit is an arrangement shown below;

A) Mode of transferring funds for those based in UK

B) Transferring funds to India from anywhere in the world
C) Funds transfer arrangement from Middle East
D) Funds transfer from far eastern countries
45. For a person going to USA for business promotion the maximum amount of foreign
currency notes that can be released is…

A) USD 25000 or its equivalent

B) USD 3000 or its equivalent
C) USD 10000 or its equivalent
D) USD 5000 or its equivalent

46. An export bill in foreign currency purchased by you r bank is remaining unpaid and you
want the foreign currency liability of the customer to be converted into Indian Rupees to
avoid fluctuation in exchange rate. This exercise is called…

E) Forward booking
F) Crystallization
G) Recovery of advance
H) Rupee export credit

47. In case a forward contract is not utilized by the customer within ……….days bank will
cancel such contract on their own.
A) 15 days
B) 30 days
C) 7 days
D) 10 days

48. Payment interest in case of following account compounded once in 180 days basis
E) Recurring Deposit
F) FCNR Deposit
G) EEFC Account
H) RFC(D) Account

49. To ensure that small gifts and pleasantries do not become bribery it is necessary to
have..
A) Total restriction on such thins
B) Well documented policy for such practices
C) Strict vigilance
d)Periodical review

50. Interest earned on the following type Non Resident Account is subject to TDS
A) Non Resident External account
B) Non Resident Resident account
C) Non Resident Ordinary Account
D) Foreign Currency Non Resident account

51. CRAR stands for..

A) Cash Reserve Account Ratio
B) Capital to Riskweighted Asset Ratio
C) Current Ratio And Returns
D) Capital Risk And Return

52. In a forward contact the maximum period available for exercising the option is ..
A) 6 months
B) 7 days
C) One month
D) 10 days
53. Under Basel Norms the minimum percentage of capital expected to be maintained
against risk weighted assets is..
A) 9%
B) 12%
C) 8%
D) 10%

54. NRE fixed deposit are accepted for a minimum period of ……...... and for maximum
period of ……….years
A) 7 days and 10 years
B) One year and 10 years
C) One year and 5 years
D) 15 days and one year

55. One of the following is not the objectives of integrated treasury is….
A) Improved profits
B) Minimize Risk
C) Maximum utilization of man power
D) Transfer pricing

56. One of the reasons why one country depends on another for goods that they require is..

M) To promote international trade

N) To increase demand for foreign goods
O) Profit Margin
P) Non availability of such goods in their country

57. In case of discount the forward margin is … to arrive at the forward rate to the sport rate

L) Added
M) Deducted
N) Multiplied
O) Dividend
58. On an investment of Rs.100 for one year payment of interest at 8% is upfront. This
means the investor has to pay for getting that security….

A) Rs.92.00
H) Rs.108.00
I) Rs.8.69
J) Rs.91.31

59. Which among the following liability is excluded from NTDL for the purpose of calculating
CRR/SLR

E) Overdue FDs
F) RD accounts where monthly installments are in arrears
G) Balance held in current account opened in the name of Proprietorship concern
H)Paid up capital and reserve

60. Which among the following is not one of the objectives of integrated treasury

I) To act as a centre of arbitrage and hedging activities

J) Improve profitability
K) To ensure decentralization
L) Efficient utilization of funds
61. Penalty charged by the transport company for not lifting the goods after reaching the
destination is called…

I) Pilferage
J) Duties
K) Demurrage
L) Additional Freight

62. Submission of report under MIS system is the function to be carried out by..

E) Front office
F) Mid Office
G) Back Office
H) Alco

63. Comparing the market rate periodically of the assets held by banks is known as....

E) Devaluation
F) Revaluation
G) Marking to market
H)Profit booking

64. A swap deal in forex market refers to…

A) The same as interest rate swap

B) Exchange of one foreign currency loan for another
C) Simultaneous buying and selling of one currency for another
D) A sale of foreign currency to be delivered at alter date

65. An arrangement where the importer in India is paying for the goods imported at a later for
the goods imported by him is called….

A) Trade Credit
B) Supplier’s credit
C) Buyer’s credit
D) Back to back credit

66. Bank of America Frankfurt has opened a LC favouring Pal Exports India payable at sight
basis.LC contains a clause saying that negotiating bank to claim reimbursement directly from
Bank of America in New York by Swift. What is the NTP prescribed by FEDAI in such case?

A) 25 days
B) 30 days
C) 15 days.
D) 5 days

67. Acronym MTCN stands for..

A) Margin Trading & Credit Notion

B) Money Transfer Control Number
C) Main Trader’s Credit Note
D) Maintenance and Transfer Code Number
68. A contract which gives the holder the right, but not the obligation to buy or sell specified
quantity of the underlying assets is known as..

A) Future
B) Option
C) Forward
D) Swap

69. Interest on FCNR deposit is calculated based on the LIBOR rate prevailing on …………..

E) Last Friday of the previous month

F) Last banking date of the previous month
G) Last date of the previous year
H) Preceding Friday.

70.IDBI has its own branch abroad in....

E) London
F) New York
G) Hong Kong
H) Dubai

71. India is facing continuous deficit in its balance of payments. In the foreign exchange
market rupee is expected to

E) Depreciate
F) Appreciate
G) Remain stable
H) Remain volatile

72. Interest in money market in USA is 4%; In India it is 6%. In the foreign exchange
market….

A) Dollar will be quoted at discount of 2% p.a.

B) Rupee will appreciate by 2% p.a.
C) Dollar will be quoted at a premium of 2% p.a.
D) Money market has no effect on foreign exchange market

73. GDR & ADR Stand for

A) Global Depository Receipts & American Depository Receipt

B) German Democratic Republic & American Democratic Republic
C) Government Department of Revenue & Allied Department of Revenue
D) Global Developmental Review & American Developmental Review

74. The proprietor of Galaxy Traders, Mr. Namdev wants to visit Srilanka for two days for
Business Development purpose. You can release foreign exchange to him upto….

A) USD 10000 or its equivalent

B) USD 30000 or its equivalent
C) USD 25000 or its equivalent
D) USD 1000000 or its equivalent
75.In a letter of credit issued by Bank of America New York k in Indian Rupees, the
negotiating bank has been authorized to claim reimbursement form SBI Bangalore. If
documents are negotiated by IDBI Bank, K H Road branch Bangalore what the NTP fixed by
FEDAI for such transaction..

A) 5 days
B) 3 days
C) 1 day
D) O day

76. The probability of the price of an investment decreasing is falling under…

A) Country Risk
B) Credit Risk
C) Market Risk
D) Operational Risk

77. . In Indirect quotation, the unit kept constant is:

A) the local currency
B) the foreign currency
C) the subsidiary currency
D) both the currencies

78. . In Indirect quotation, a bank buys foreign currency at __ price and sells at a ___ price.
A) High, low
B) Low, high
C) Mean, low
D) Average, market

79. Call money borrowing is subject to

A) A minimum of Rs. 1 lakh
B) Maximum of 100% of Bank’s Tier I and II capital
C) 25% of Aggregate Deposit
D) 50% of NDTL

80. Securities having tenor of one year and above is ...

A) Money Market Instrument
B) Dated securities
C) T Bills
D) Commercial paper

81. Over bought position means.

A) Purchases are more than sales
B)Sales are more than purchases
C)Purchase and Sales are equal
D)Purchases made in anticipation of sales

82. Bank rate announced by RBI is applied for the following types of transactions
A)Rediscounting of bills by RBI which are discounted by banks
B)Borrowing through Repo.
C)Lending through Reverse Repo
D)Marginal Standing facility
83. A corporate would be eligible to issue CP provided
A)The net worth of the company is not less than Rs.4 Crores
B)Corporate has not availed any bank loan
C)Loan availed is not a standard asset
D)Participant is a PSU

84. . This is one of the measures initiated by RBI to widen the money market operations
A)Fixing limit for inter-bank transactions
B) Setting up of DHFI
C)Giving interest on CRR
D)Restrictions on Treasury operation

85. The term `notional due date’ refers to _____.

A) The due date of an overdue bill
B)The date on which an export bill is likely to be paid
C)The due date arrived at without considering the holidays
D) The due date of an import bill

86. 9.85% GOI 2015 securities with an Yield of 8.70% was Bought at Rs.118.50. Whcn the
Yield falls to 8.25% what will happen to the price of the Bond?
A) Bond Price Falls
B) Bond Price does not Change
C) Bond Price rises
D) Bond price is insensitive to Yield

87. The Main drivers for transformation of trreasuries from mere SLR,CRR keepers into Profit
Centres-------
A) Spurt in Volumes
B) Volatility of Interest Rates
C) Regulatory Fiat
D)Sudden increase in the expertise of the Treasury Personnel

88. The following are a few derivatives which are also treasury products:
A) Tier II Bonds issued by the Bank
B) Floating Rate Bonds
C) External Commercial Borrowings
D) IRS, Swaps, Futures and Options

89. What is Unethical when the Dealers handle confidential information--------

A) Not revealing the information to any body
B) Destroying the information
C) Using the information for competitive advantage knowing that is was
privileged
D) Keeping and storing the information with themselves.

90. The middle office of the treasury calculates and prepares a ____ report.
A)VaR
B)ALCO
C)Risk
D)Cross-currency
91. An FCNR B account is opened for EUR 50000. On maturity the deposit is repayable in:
A)Euro only
B)Euro or US dollar only
C)US dollar only
D)Any currency as desired by the depositor
92. The Bank’s Balance Sheet is funded not only by Deposits but also by------
A) Assistance of Head Office
B) Help from RBI
C) Contribution from peer banks
D) Market Borrowings

93.VAR 99% confidence level implies:

A) 99% probability of the stated loss
B) 1% probability of the stated loss
C) 99/2% probability of the stated loss
D) cannot be calculated