FOREX QUESTION BANK

Foreign Exchange Markets

1.   What is foreign exchange market? Explain the features.

2.   What is exchange rate system? Explain various exchange rate system.

3.   Differentiate ‘adjustable peg system’ with crawling peg system.

4.   Summarise the arguments for and against fixed exchange rate.(flexible also)

5.   Note on Brittonwood system.

6.   A note on smithsoian committee.

7.   What is option? State the types.

8.   What is swap? What are the different types.

9.   What is future market? What is the difference between future contract and forward contract?

10.      Explain the various rik in foreign exchange market.

11.      What is arbitrage? Critically examine the theory of interest rate arbitrage.

12.      Note on Swift/ CHIPS , CHAPS

13.      What are the positive and negative impact of globalisation and liberalisation in Indian’s foreign exchange market..

14.      What is current account convertiblity?

15.      What is capital account convertibility?

16.      Explain the advantages and disadvantages of full convertibility of Indian currency.

17.      Foreign Excahnge Management Act 1999- Provision rules and regulations prior approval from RBI

18.      What are current account transactions?

19.      What are capital account transactions?

20.      Administrative set up for FEMA – Authorised person, Authorised dealers, Foreign Excahnge Dealers Association, Authorised Money changers.

21.      Foreign currency account: Nostro Account, Vostro Account, Lioro Account.

22.      Explain Indian multinationals and their impact on Indian Foreign Exchange.

23.      What is triffine paradox?

Practical

1.   Direct Quotation

2.   Indirect Quotation- Spot and Forward Transaction

3.   Ready Exchange Rates Based on cross curency

4.   Expalin the role played by RBI in foreign exchange markets.

5.   Explain the  ways in which exchange rates are quoted.

6.   What are EURO currency markets and what are the calculation factors?

7.   Features of EURO currency market.

8.   Spot and forward rate

9.   Ready Excahnge Cross currency.

Important terms and concepts

1.   Direct quotes

2.   Indirect quotes

3.   American quotes

4.   European quotes

5.   Bid/offer rate

6.   Ask/sell rate

7.   Vechile currency

8.   Spot transaction

9.   Forward transaction

10.      Cross rates

11.      Correspondent banks

12.      Non-deliverable forward