QN1. The transaction in which the bank receives local currency from the customer and pays him foreign currency is a-
A. purchase transaction
B. sale transaction
C. direct transaction
D. indirect transaction
Answer
Answer: B
QN2. The following is not a sale transaction of foreign exchange:
A. issue of a foreign demand draft
B. payment of an import bill
C. realisation of an export bill
D. none of the above
Answer
Answer: C
QN3. Interest for the transit period is included in –
A. bill buying rate
B. bill selling rate
C. usance bill buying rate
D. none of the above
Answer
Answer: D
QN4. The exchange margin included by a bank in the exchange rate quoted to the customer is-
A. prescribed by Reserve Bank
B. prescribed by FEDAI
C. determined by the bank concerned within the limits prescribed by FEDAI
D. determined by the bank concerned
Answer
Answer: D
QN5. The minimum fraction in which exchange rates are quoted by banks to their customers is-
A. 0.0001
B. 0.005
C. 0.0025
D. 0.01
Answer
Answer: C
QN6. The exchange rates quoted by an authorised dealer to its customers are known as-
A. authorised rates
B. commercial rates
C. merchant rates
D. indirect rates
Answer
Answer: C
QN7. TT buying rate is not applicable for the following transaction-
A. encashment of a DD for which cover has already been received
B. encashment of an MT for which paying bank has to make reimbursement claim with the issuing bank.
C. realisation of a foreign bill sent for collection
D. payment of a cable transfer.
Answer
Answer: B
QN8. Bill buying rates are applicable to
A. all export transactions
B. any transaction to which TT buying rate is not applicable
C. realisation of a foreign bill sent for collection
D. only for purchase/negotiation of export bills
Answer
Answer: D
QN9. As per FEDAI Rules, the rupee value of all foreign exchange transactions should be rounded off tto-
A. nearest rupee
B. nearest ten rupees
C. nearest paise
D. nearest ten paise
Answer
Answer: A
QN10. Buying rate for ready merchant rate is derived from-
A. interbank spot buying rate
B. interbank ready buying rate
C. interbank spot selling rate
D. interbank ready selling rate
Answer
Answer: A
QN11. The quotation for merchant transaction is-
A. two-way quotation
B. applicable to all merchant transactions uniformly
C. specific to the transaction for which it is quoted
D. applicable only for traders.
Answer
Answer: C
QN12. An export bill is taken for collection by the bank. The exchange rate applied for the transaction will be:
A. bill buying rate
B. bill selling rate
C. TT buying rate as on the date of sending the bill for collection
D. TT buying rate as on the date of realisation of the bill
Answer
Answer: D
QN13. An import customer accepts a bill drawn on him. The bank will apply-
A. bill selling rate
B. bill acceptance rate
C. TT selling rate
D. no exchange rate, since no foreign exchange transaction is executed
Answer
Answer: D
QN14. TT buying rate is applicable for transactions where-
A. remittance is received by telecommunicaton
B. remittance is sent by telecommunication
C. the nostro account of the bank is already credited
D. the nostro account of the bank is already debited
Answer
Answer: C
QN15. The term notional due date refers to-
A. the date on which an export bill is likely to be paid
B. due date arrived at without considering the holidays
C. due date of a bill drawn without a due date
D. none of the above
Answer
Answer: A
QN16. TT selling rate is applicable for transactions of1/
A. issue of telegraphic transfers
B. outward remittances other than for retirement of import bill
C. retirement of import bill for which remittance is sent by TT
D. payment of telegraphic transfer
Answer
Answer: B
QN17. In calculating cross rates, exchange margin is entered-
A. only once in the dollar/rupee rate
B. only once in the dollar/foreign currency rate
C. twice in the dollar/rupee rate and dollar/foreign currency rate
D. twice in the dollar/rupee rate and dollar/foreign
Answer
Answer: A
QN18. The merchant rate for pound sterling is calculated by banks in India-
A. directly based on interbank sterling/rupee rate
B. directly based on RBI rate for sterling
C. as a cross rate using dollar/rupee rate and dollar/sterling rate
D. as a cross rate using Euro/rupee rate and Euro/sterling rate
Answer
Answer: C
QN19. For calculating cross currency rates, banks in India use the dollar/foreign currency rate quoted in
A. Mumbai
B. London
C. New York
D. any international market
Answer
Answer: D
QN20. For cross-currency quotation rounding off is done to the nearest multiple of-
A. 0.0001
B. 0.0025
C. 0.001
D. No rounding off.
Answer
Answer: B
QN21. for option forward purchase transactions the forward premium will be reckoned
A. based on earliest delivery date
B. based on latest delivery date
C. based on the average due date for delivery
D. none of the above.
Answer
Answer: A
QN22. cover deal by a dealer of an authorised dealer is undertaken to-
A. profit from exchange rate movements
B. cover up mistakes done by the dealer
C. square up the position resulting from dealings with customers
D. none of the above.
Answer
Answer: C
QN23. For funding the vostro acount, the bank in India will apply-
A. its TT buying rate
B. its TT selling rate
C. interbank spot buying rate
D. interbank spot selling rate
Answer
Answer: C
QN24. The objective of trading inforeign exchange by a dealer of a bank is to-
A. make profit out of exchange rate fluctuations
B. insulate the bank from exchange rate changes
C. comply with exchange control regulations
D. none of the above
Answer
Answer: A
QN25. For the banker, the spread will be wider when-
A. purchase of foreign currency from a customer is covered by a sale to another customer of the bank
B. merchant trades are covered by interbank deals
C. exposure in one currency is covered by a position in another currency
D. purchase of foreign currency from a customer is covered by sale to customer of another bank
Answer
Answer: A
QN26. Both legs of swap will be executed
A. at the same rate
B. on the same date
C. at different rates
D. at different rates on different dates
Answer
Answer: D
QN27. A swap deal is executed by
A. settling the difference int he rates
B. actual delivery of currencies
C. entering into another swap deal
D. none of the above
Answer
Answer: B
QN28. Foreign Exchange Management Act Passed in the year
A. 1997
B. 1998
C. 1999
D. 2000
Answer
Answer: C
QN29. Euro was launched on
A. 1999
B. 2000
C. 2001
D. 2002
Answer
Answer: A
QN30. ——– transaction the quoting bank acquires foreign currency and parts with home currency
A. Sale
B. purchase
C. spot
D. forward
Answer
Answer: B
QN31. In a ———— transaction the quoting bank parts with foreign currency and acquires home currency
A. sale
B. purchase
C. spot
D. forward
Answer: B
QN32. TT stands for
A. Telegraphic Transfer
B. Telex Transfer
C. Telephone Transfer
D. Today Transfer
Answer
Answer: A
QN33. The rate applied when the Nostro account of the bank would already have been credited
A. TT selling rate
B. Bill buying rate
C. Bill selling rate
D. TT buying Rate
Answer
Answer: D
QN34. The rate applied when payment of demand draft drawn on the bank where bank’s nostro account is
already credited
A. TT selling rate
B. Bill selling rate
C. Bill buying rate
D. TT buying Rate
Answer
Answer: C
QN35. The rate applied when payment of mail transfers drawn on the bank where bank’s Nostro account is already credited
A. TT selling rate
B. Bill selling rate
C. TT buying Rate
D. Bill buying rate
Answer
Answer: C
QN36. The rate applied when payment of telegraphic transfers drawn on the bank where bank’s Nostro account is already credited
A. TT selling rate
B. Bill selling rate
C. Bill buying rate
D. TT buying Rate
Answer
Answer: D
QN37. The rate applied when foreign bills collected and the bank’s Nostro account abroad is credited
A. TT buying Rate
B. TT selling rate
C. Bill selling rate
D. Bill buying rate
Answer
Answer: A
QN38. The rate applied when a foreign bills is purchased
A. TT buying Rate
B. TT selling rate
C. Bill selling rate
D. Bill buying rate
Answer
Answer: D
QN39. The rate used for all transactions that do not involve handling of documents by the banks is
A. TT buying Rate
B. TT selling rate
C. Bill selling rate
D. Bill buying rate
Answer
Answer: B
QN40. TT selling rate is calculated on the basis of ——selling rate
A. interbank
B. merchant
C. spot
D. security
Answer
Answer: A
