IDBI-FX-LU6-Treasury Management-Part 1

The four major currencies in the world are free to float against each other except one of the following. Identify.

• EURO

• USD

• Spanish Peso

The term Euro-currency market refers to.......................

• The market where the borrowing and lending of currencies take place outside the country of issue

• The countries which have adopted Euro as their currency

• The market in which Euro is exchanged for other currencies

In a quote exchange rate, the currency that is to purchase with another currency is called...........

• Quote currency

• Base currency

• Local currency

Convertibility of a currency is indicated by its.................

• conversion at market rates

• Conversion at market rate but with restrictions imposed by the government

• conversion at market rate without any quantitative restriction by government.

Trading in Foreign exchange refers to..............................

• Purchase/sale of FC in the market other than to cover merchant related transactions

• Purchase/sale of FC in the market only to maintain square position at EOD

• Purchase/sale of FC in the market related to merchant transactions only transactions

"Swap Deal" transaction refers to...............

• Bank buys and sells the specified FC simultaneously for same maturities

• Bank buys and sells the specified FC simultaneously for different maturities

• "Bank buys and sells the specified FC for another currency

Exchange position refers to................

• Net balance of aggregate purchases and sales made by the bank in a particular currency

• Aggregate purchases made by the bank in a particular currency

• Aggregate sales made by the bank in a particular currency

While computing the Exchange position, the dealer will take into account..............

• All purchases/sales made on Forward basis

• All purchases/sales made on Spot basis only

• All purchases/sales made on Spot or Forward basis

You have entered into a Forward Purchase contract with your exporter for USD 50,000/- for two months. Delivery is in April'23. This will enter into the exchange position of Delaers' book on...................

• The date our Nostro account is credited with the proceeds of the export bill

• The date of entering into the Forward contract

• The date of tendering of export documents for purchase/negotiation/discount

Exchange position is also known as...................

• "Trading Position"

• "Dealing position"

• "Settlement position"