Fex Post Class Lc 1 to 28

7/26/2019 Fex Post Class Lc 1 to 28

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Learning ConfrmationYou have completed your quiz attempt. You have scored 0 point(s).

Question ResultsScore0of 1

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1. Violation of FEMA provisions is a criminal offence.

TRUE

FALSE

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2. Exchange control refers to restriction on imports and exports.

TRUE

FALSE

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3. The correspondent relationship between banks is also known as agency

arrangement.

TRUE

FALSE


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4. The practice of exchange control is unique to India.

TRUE

FALSE

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5. Example of prohibited foreign exchange transaction is the remittance

out of lottery winnings.

TRUE

FALSE


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1. Foreign exchange markets are closed on Saturdays.

TRUE


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FALSE

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2. The euro is the most traded currency in foreign exchange markets.

TRUE

FALSE

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3. In the pure form of arbitraging the operator has no investment.

TRUE

FALSE

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4. Buying and selling transactions are always viewed from the bank's

perspective.

TRUE

FALSE

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5. A tom transaction is deliverable on the same day.


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TRUE

FALSE

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6. The difference between the bid rate and offer rate in inter-bank

quotation is called spread.

TRUE

FALSE

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7. The largest foreign exchange market in the world is in Singapore.

TRUE

FALSE

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8. European quotations are quotations obtained from the European

markets.

TRUE


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FALSE

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9. All inter-bank deals should pass through exchange brokers.

TRUE

FALSE

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10. Exchange rates quoted for a currency by different market

makers may differ, but only to the extent of transaction costs.

TRUE

FALSE


Question Results

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1. A credit in our nostro account will appear as a credit in mirror account.

TRUE


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FALSE

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2. Remittances can be made only to centers where bank holds nostro

accounts.

TRUE

FALSE

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3. Inward remittances which are not credited to accounts appear as pending

credit entries in nostro.

TRUE

FALSE

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4. Selling rate is quoted by bank for outward remittance.


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TRUE

FALSE

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5. Mirror account is not required for USD nostro accounts.

TRUE

FALSE

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6. Remittance to meet medical expenses of a relative abroad is a capital

account transaction.

TRUE

FALSE

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7. Remittance permitted under Liberalized Remittance Scheme is USD

300000.

TRUE


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FALSE

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8. Form A 1 is used for remitting import payments.

TRUE

FALSE

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9. Foreign contributions to an NGO can be received in any number

of bank accounts.TRUE

FALSE

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10. In FCRA 2010, Chapter IV deals with procedures relating to

receipt of foreign donation and their utilization in bank accounts.


9/79

TRUE

FALSE



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1. Traders react to news when it breaks rather than waiting for markets to

open.

TRUE

FALSE

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2. Reasons for fluctuations in exchange rates can be pin-pointed.

TRUE

FALSE

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3. Mutual funds can also take position in the derivatives market.

TRUE

FALSE

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4. Banks participate in the capital market and money market.

TRUE

FALSE

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5. London is not a major foreign exchange trading center.

TRUE

FALSE


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1. Overdue export bills are crystallized.

TRUE

FALSE

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2. The TT selling rate is applied for payment of import bills.

TRUE

FALSE

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3. The Bill of entry is the ultimate proof of imports.

TRUE

FALSE

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4. Inward remittance for an NRE account comes through SWIFT

message.


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TRUE

FALSE

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5. Form A 2 must be furnished by an importer while retiring import bills.

TRUE

FALSE


Question Results

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1. Foreign exchange was considered a rare commodity till

1970s

1990s

2010s

1980s


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2. Transactions prohibited under rule 3 of the foreign exchange management

current account transactions rules 200 does not apply to:

Payment related to `call back ser!ces" o# tele$%ones

Rem!ttance o# !nterest !ncome on #&nds %eld !n 'on Res!dent S$ec!al R&$ee

Payment o# comm!ss!on on e($orts &nder R&$ee State )red!t Ro&te e(ce$t &

Rem!ttance #or st&dy abroad

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3. Remittance out of lottery winning proceeds is:

Perm!tted &nder r&le + o# t%e #ore!,n e(c%an,e mana,ement c&rrent acco&nt

Pro%!b!ted &nder r&le + o# t%e #ore!,n e(c%an,e mana,ement c&rrent acco&nt

Perm!tted &nder r&le + o# t%e #ore!,n e(c%an,e mana,ement c&rrent acco&nt

Pro%!b!ted &nder r&le + o# t%e #ore!,n e(c%an,e mana,ement c&rrent acco&nt

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4. Section ____ of FEMA Act provides control over repatriation of sale

proceeds of exported goods.


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7

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5. As per section 10 of FEMA Act who is not considered as authorized

dealer?

E(c%an,e -roker

-anks

Restr!cted 3oney )%an,ers

F&ll4#led,ed 3oney )%an,ers


Question Results

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1. IEC code is issued by RBI.

TRUE

FALSE


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2. Exim policy is valid for 5 years.

TRUE

FALSE

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(skipped)3. Pre-shipment credit can be extended in foreign currency.

TRUE

FALSE

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4. Restricted items can be imported only under a license.

TRUE

FALSE

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5. For making payments against imports the importer has to apply to the

Bank in form A 2.

TRUE


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FALSE

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6. Bill of Entry is the documentary evidence of imports.

TRUE

FALSE

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7. State traded goods can be imported by any trader.

TRUE

FALSE

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(skipped)8. Import licence will indicate the value on CIF basis.

TRUE

FALSE


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1. Settlement of transactions between the banks is easy when there is

accounting relationship.

TRUE

FALSE

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2. Confirming of our L/ C will not be done by our correspondent bank.

TRUE

FALSE

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3. The decision to appoint a bank abroad as correspondent bank depends

on the volume of transactions and direction of flow.

TRUE


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FALSE

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4. Unreconciled nostro entries can arise from charges debited by overseas

bank, but not absorbed at our end.

TRUE

FALSE

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5. We do not need the help of correspondent bank in collection of

cheques drawn abroad.

TRUE

FALSE


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1. Authorized Dealers of Category II are not members of FEDAI.


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TRUE

FALSE

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TRUE

FALSE

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3. The FIMMDA and FEDAI are not nodal agencies for administering rupee

interest rates and foreign exchange benchmarks in the markets.

TRUE

FALSE

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4. The FEMA has 7 chapters with 49 sections.


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TRUE

FALSE

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5. Commercial banks authorized to deal in forex are classified as

Authorized Dealers of Category II.

TRUE

FALSE


Question Results

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1. Authorized Dealers of Category II are not members of FEDAI.

TRUE

FALSE

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TRUE

FALSE

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3. The FIMMDA and FEDAI are not nodal agencies for administering rupee

interest rates and foreign exchange benchmarks in the markets.

TRUE

FALSE

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4. The FEMA has 7 chapters with 49 sections.

TRUE

FALSE

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5. Commercial banks authorized to deal in forex are classified as

Authorized Dealers of Category II.

TRUE


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FALSE


Question Results

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1. Card rates are applicable for transactions in international credit cards.

TRUE

FALSE

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2. Inter-bank rate, based on which merchant rate is quoted is known as base

rate.

TRUE

FALSE

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3. Bill selling rate is used when export bill is dishonored.

TRUE


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FALSE

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4. Exchange margin is deducted from inter-bank rate to arrive at the

merchant buying rate.

TRUE

FALSE

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5. The quotation for a merchant transaction is a two-way quotation.TRUE

FALSE

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6. Interest for transit period is included in bill buying rate

TRUE


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FALSE

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7. The rates quoted by a Bank to its trade customers are known as

trading rates.

TRUE

FALSE

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8. TT rate is applied for transactions where nostro account has

already been credited.

TRUE

FALSE

Learning Confrmation

You have completed your quiz attempt. You have scored 0 point(s).

Question Results

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1. Card rates are applicable for transactions in international credit cards.

TRUE

FALSE

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2. The inter-bank rate, based on which merchant sale rate is quoted, is

known as base rate.

TRUE

FALSE

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3. The TT selling rate is used when import bill is retired.

TRUE


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FALSE

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4. The exchange margin is added to the inter-bank rate to arrive at the

merchant selling rate.

TRUE

FALSE

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5. The quotation for a merchant sale transaction is a two-way quotation.

TRUE

FALSE

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6. The selling rates quoted by a bank to its trade customers are known

as trading rates

TRUE

FALSE

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7. The TT selling rate is applied to transactions where no handling of

documents is involved

TRUE

FALSE



Question Results

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1. A forward contract provides a perfect hedge for currency exposures.


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TRUE

FALSE

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2. OTC derivatives are standardized products.

TRUE

FALSE

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3. A forward contract has attendant credit risk and market risk.

TRUE

FALSE


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4. Four types of derivative instruments are forwards, futures, options and

swaps.

TRUE

FALSE

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5. Under an option forward contract, the option of choosing the delivery

date within the option period rests with the customer.

TRUE

FALSE

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6. On the due date of a forward contract, the customer may opt for spot

rate, if it is favorable to him.

TRUE


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FALSE

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7. For a receivable due in December, a forward contract can bebooked to fall due in December only, not earlier or later.

TRUE

FALSE

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8. For an exposure in GBP, the customer may choose to book a

forward contract in Euro.

TRUE


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FALSE

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9. An option forward contract is also known as option contract.

TRUE

FALSE

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10. When the customer delivers foreign exchange on the due date,

the transaction is done at the rate agreed.

TRUE

FALSE



Question Results


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1. A customer can approach the bank for cancellation of a forward contract

when the underlying transaction becomes unproductive.

TRUE

FALSE

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2. A forward contract cannot be cancelled before its due date.

TRUE

FALSE

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3. A contract booked can be partly delivered and partly cancelled by the

customer.


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TRUE

FALSE

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4. An option forward contract can be cancelled only by the Bank.

TRUE

FALSE

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5. A customers consent is required for cancellation of forward contract

remaining overdue beyond 15 days from the due date.

TRUE

FALSE


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6. Cover for a deferred payment import is available on roll-over basis.

TRUE

FALSE

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7. The charges for automatic cancellation do not include exchange

difference.

TRUE

FALSE

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8. The interest on the outlay of funds is recovered from the customer

in the case of early delivery.


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TRUE

FALSE

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9. Interest on outlay of funds is not collected if the amount is less

than Rs.100.

TRUE

FALSE

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10. Rule 8 of FEDAI pertains to automatic cancellation of forward

contracts.

TRUE


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FALSE



Question Results

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1. Early extension of forward contract does not involve cancellation and

rebooking.

TRUE

FALSE

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2. Where forward margin is in premium it will be rounded off to the lower

month (or rate at the previous month) to arrive at forward buying rate.

TRUE


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FALSE

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3. Re-booking is done at the old contracted rate.

TRUE

FALSE

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4. Cancellation is done at the relevant forward rate.

TRUE

FALSE

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5. FEDAI has clarified that it would not be necessary to load exchange

margins when both the cancellation and re-booking of forward contracts

are undertaken simultaneously.


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TRUE

FALSE

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6. Early extension of forward contracts is regulated by SEBI.

TRUE

FALSE

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7. Extension of forward contract on due date is regulated by Forward

Markets Commission.

TRUE

FALSE


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8. Forward contract is an OTC product.

TRUE

FALSE

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9. Request for extension of forward contract before due date should

be rejected.

TRUE

FALSE

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10. Before an overdue forward contract is cancelled by the bank,

the customer may request its extension.


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TRUE

FALSE



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1. A currency swap involves exchange of interest rate payments and principal

amounts.

TRUE

FALSE

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2. Basis swaps are cash flows where both the legs of the swap are

referenced to the same floating rates.


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TRUE

FALSE

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3. The bench mark rate in the case of IRS is already determined.

TRUE

FALSE

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4. Prices of IRS are quoted in terms of floating leg.

TRUE

FALSE


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5. An IRS is a series of FRAs.

Tr&e

False

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6. Capital adequacy for the Bank for undertaking swap need not be

calculated.

TRUE

FALSE

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7. In the Indian market Banks are allowed to run a book of swaps

which have an INR leg.


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TRUE

FALSE

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8. The IRS cannot be used by scheduled commercial banks for their

own balance sheet management.

TRUE

FALSE

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9. The ISDA with suitable modification is the standard

documentation for IRS.

TRUE


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FALSE

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10. There is no currency risk in Differential swaps.

TRUE

FALSE



Question Results

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1. Put option gives the holder the right to sell a specified quantity of underlying

asset.

TRUE


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FALSE

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2. Mutual funds are players in the options market.

TRUE

FALSE

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3. CBOE is an abbreviation for Company Board of Options Exchange

TRUE

FALSE

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4. Banks are players in the options market.


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TRUE

FALSE

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5. Spot price in addition to the strike price is equal to intrinsic value of an

option.

TRUE

FALSE

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6. The underlying for an option can be physical commodities.

TRUE

FALSE


47/79

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7. European option can be exercised on or before the expiration date.

TRUE

FALSE

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8. Open interest refers to the total number of option contracts

outstanding in the market at any given point of time.

TRUE

FALSE

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9. Option casts an obligation on the buyer.


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TRUE

FALSE

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10. Options and forward contracts are the same.

TRUE

FALSE



Question Results

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1. The size and maturity of a futures contract is customized.

TRUE


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FALSE

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2. The maturity and size of futures contracts are standardized.

TRUE

FALSE

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3. Markets for forward contracts are liquid.

TRUE

FALSE

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4. Futures contracts are liquid.


50/79

TRUE

FALSE

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5. Marking to market of outstanding positions at the end of each trading

day is a feature of futures market.

TRUE

FALSE

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6. Either party can walk away unilaterally from the forward contract.

TRUE


51/79

FALSE

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7. A forward contract is an OTC agreement.

TRUE

FALSE

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8. Counter-party risk exists in futures contract.

TRUE

FALSE

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9. The physical delivery of futures contract is minimal and positions

are normally closed out by opposite trades.

TRUE

FALSE

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10. Futures are not available on bonds.

TRUE

FALSE


Question Results

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1. Residents of a country do not indulge in economic activities with theresidents of other countries.


53/79

TRUE

FALSE

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2. Official reserves account is one of the components of BoP statement.

TRUE

FALSE

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3. India's forex reserves on December 2014 was sufficient to meet 8

months of imports.

TRUE

FALSE


54/79

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4. A change in the balance of payments of a country will affect the

exchange rate of its currency.

TRUE

FALSE

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5. Exchange control means exchange restriction only.

TRUE

FALSE



Question Results


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1. ECB is governed by:

Fore!,n E(c%an,e Re,&lat!on Act

Sec&r!t!5at!on and Reconstr&ct!on o# F!nanc!al Assets and En#orcement o# Se

6ebt Recoery Tr!b&nal Act

Fore!,n E(c%an,e 3ana,ement Act

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2. Which of the following statements is true for financial institutions and

banks for obtaining ECBs under Automatic Route?

T%e ma(!m&m l!m!t o# E)- !s US20 m!ll!on/

T%e ma(!m&m l!m!t o# E)- !s US0 m!ll!on/

T%ere !s no l!m!t #or t%em &nder A&tomat!c Ro&te/


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T%ey cannot access E)- #&nds &nder A&tomat!c Ro&te/

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3. Refinancing an existing ECB means:

bta!n!n, add!t!onal #!nance a,a!nst sec&r!ty o# t%e e(!st!n, E)-

S&bst!t&t!n, an e(!st!n, E)- !t% a #res% E)-

Pre4$ayment o# an e(!st!n, E)-

:ett!n, a ne E)- !t%o&t d!st&rb!n, t%e e(!st!n, E)-

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4. When Authorized Dealers issue guarantee, LC or LOU for Trade

Credits:

Re$ort!n, to R-. !s not re;&!red &$ to US20 m!ll!on/


57/79

Re$ort!n, to R-. !s to be made !n t%e $rescr!bed $ro#orma/

Re$ort!n, !s to be made only !# t%e amo&nt e(ceeds US m!ll!on/

Re$ort!n, !s re;&!red only !# ,&arantee< L)< or LU !s #or &nl!m!ted amo&nts

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5. ECB funds can be used for:

.nestment !n s%are market

.nestment !n $ro=ects

.nestment !n real estate

.nestment !n a,r!c&lt&ral act!!t!es

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6. For ECB under Automatic Route, RBI provides:


58/79

Loan Re,!strat!on '&mber

Loan Pre4$ayment Perm!ss!on

Loan .nstallment Payment '&mber

Loan .nterest Payment '&mber

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7. For ECB under Approval Route, prior approval should be obtained

from:

:oernment o# .nd!a

Resere -ank o# .nd!a

3!n!stry o# E(ternal A##a!rs

3!n!stry o# F!nance


59/79

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8. ECB can be raised only by:

F!rms and com$an!es

3&lt!4nat!onal com$an!es

)or$orates re,!stered &nder t%e )om$an!es Act

-anks

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9. For the purpose of classification, ECB is a part of:

-alance o# Payment

-alance o# Trade

)&rrent Acco&nt


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)a$!tal Acco&nt

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10. What is the present all-inclusive cost limit for interest payable

on ECBs for more than five years?

L.-R > +00 bas!s $o!nts

L.-R > 00 bas!s $o!nts

L.-R > +0 bas!s $o!nts

T%ere !s no ce!l!n, on !nterest $ayable



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61/79

1. Exporters should submit quarterly progress reports to all the members of

the Working Group.

TRUE

FALSE

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2. Bid bond guarantee does not help contractors to participate in global

tenders.

TRUE

FALSE

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3. Retention Money Guarantee enables the exporter to obtain release of

retained payments from the client.


62/79

TRUE

FALSE

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4. Exim Bank is the focal point in Working Group.

TRUE

FALSE

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5. Technology transfer is not classified as project export.

TRUE

FALSE


63/79



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1. SWIFT cannot be considered as a payment mechanism.

TRUE

FALSE

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2. An LC is a payment mechanism.

TRUE

FALSE

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3. A bid-bond guarantee issued by the bank helps importer of diamonds

participate in the auction abroad.

TRUE

FALSE

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4. Guarantee is a non-fund based limit.

TRUE

FALSE

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5. ECB is a fund based facility from a bank in India.

TRUE


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FALSE

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6. Buyer's credit is a form of trade credit.

TRUE

FALSE

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7. Use of ACU mechanism does not save cost for an Indian importer.

TRUE

FALSE

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8. Opening charges and commitment charges are collected by the

bank establishing an import letter of credit.

TRUE

FALSE



Question Results

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1. RBI has fixed a monetary ceiling for use of international credit card for

payment.

TRUE

FALSE

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2. Use of International credit cards for payment in forex in Nepal and Bhutan

is not permitted.

TRUE

FALSE

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3. SWIFT facilitates outward remittance from India.

TRUE

FALSE

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4. Cash advances on international credit card attract finance charges.

TRUE


68/79

FALSE

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5. Travel cards are not pre-paid.

TRUE

FALSE

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6. Wire transfer is a mode of outward remittance from India.

TRUE

FALSE

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7. Foreign currency demand draft can be issued only in USD.

TRUE


69/79

FALSE

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8. Correspondent banking helps in issuance of demand draft.

TRUE

FALSE



Question Results

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1. FCRA 1976 now stands repealed.


70/79

TRUE

FALSE

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2. Advance intimation on proposed inspection is not given by Monitoring Unit.

TRUE

FALSE

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3. FCRA 2010 is applicable to HUF.

TRUE

FALSE


71/79

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4. Interest earned on foreign contribution is also treated as foreign

contribution.

TRUE

FALSE

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5. More than 50% of foreign contribution received can be utilized for

administrative expenses without prior approval of Central Government.

TRUE

FALSE



Question Results


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1. A remitter under LRS need not have been a customer since one year.

TRUE

FALSE

Score0of 1

(skipped)

2. FEMA 1999 does not apply to remittances made by residents.

TRUE

FALSE

Score0of 1

(skipped)

3. FEMA 1999 defines the current account and capital account

remittances.


73/79

TRUE

FALSE

Score0of 1

(skipped)

4. Prior remittance, the remitter should have maintained an account with

the concerned branch for at least one year.

TRUE

FALSE

Score0of 1

(skipped)

5. A resident going abroad as a tourist can carry foreign currency to the

extent of USD 4,000.

TRUE


74/79

FALSE



Question Results

Score0of 1

(skipped)

1. Interest on NRO SB is taxable.

TRUE

FALSE

Score0of 1

(skipped)

2. An FCNR account can also be opened as a savings deposit.

TRUE


75/79

FALSE

Score0of 1

(skipped)

3. On maturity, the repayment of an FCNR account in one foreign currency

can be made in another foreign currency.

TRUE

FALSE

Score0of 1

(skipped)

4. Inward remittance for an NRE account comes through SWIFT message.

TRUE

FALSE

Score0of 1

(skipped)


76/79

5. Interest rates on FCNR accounts are not linked to LIBOR.

TRUE

FALSE



Question Results

Score0of 1

(skipped)

1. EEFC accounts can be maintained in USD only.

TRUE

FALSE

Score0of 1

(skipped)

2. EEFC accounts save on transaction costs.


77/79

TRUE

FALSE

Score0of 1

(skipped)

3. A close relative can be a joint EEFC accountholder on former or survivor

basis.

TRUE

FALSE

Score0of 1

(skipped)

4. An EEFC account can be opened as a savings account.

TRUE


78/79

FALSE

Score0of 1

(skipped)

5. The funds in an EEFC account can be used for payment of customs

duty.

TRUE

FALSE

Score0of 1

(skipped)

6. Only after foreign exchange is realized, the EEFC account is

credited.

TRUE

FALSE

Score0of 1(skipped)


79/79

7. The balance amount in the account is eligible for grant of fund

based facility.

TRUE

FALSE

Score0of 1

(skipped)

8. Airfare and hotel expenses can be paid in foreign currency from an

EEFC account.

TRUE

FALSE

Fex Post Class Lc 1 to 28

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