The NISM Series I Currency Derivatives mock test on SarkariExam.Center gives you 100 MCQs in 120 minutes, replicating the exact National Institute of Securities Markets certification exam pattern. Passing marks are 60 out of 100 with 0.25 negative marking per wrong answer. The certificate stays valid for 3 years. Practice sets cover all 6 chapters: currency futures, options, hedging strategies, clearing and settlement, risk management, and regulatory framework. Start free now.
NISM Series I Currency Derivatives Exam Pattern
The National Institute of Securities Markets (NISM), a SEBI subsidiary, conducts the Series I Currency Derivatives Certification Examination as an online proctored test. Every mock test on SarkariExam.Center follows this exact structure.
| Parameter | Details |
|---|---|
| Exam Name | NISM Series I: Currency Derivatives Certification Examination |
| Certifying Body | National Institute of Securities Markets (NISM), Mumbai |
| Total Questions | 100 MCQs |
| Duration | 120 minutes (2 hours) |
| Marks Per Question | 1 mark |
| Passing Score | 60 out of 100 (60%) |
| Negative Marking | 0.25 marks per wrong answer |
| Certificate Validity | 3 years from date of passing |
| Registration Fee | Rs. 1,500 plus applicable taxes |
| Exam Mode | Online proctored test at NISM test centres or remote proctoring |
Chapter-Wise Syllabus and Weightage in NISM Series I
Strategies Using Currency Derivatives carries the highest weightage at 12%, making it the single most important chapter to master before your exam date. Use this breakdown to allocate mock test practice time correctly.
| Chapter | Weightage | Key Topics |
|---|---|---|
| Strategies Using Currency Derivatives | 12% | Hedging with futures and options; speculation strategies; arbitrage between forwards and futures |
| Introduction to Foreign Exchange Markets | 12% | Forex market structure; spot rates; forward rates; interest rate parity; purchasing power parity; FBIL reference rate |
| Exchange Traded Currency Futures | 10% | Contract specifications; lot size; tick size; USDINR, EURINR, GBPINR, JPYINR pairs; pricing using cost of carry model |
| Exchange Traded Currency Options | 10% | Call and put options; intrinsic value; time value; Option Greeks (Delta, Gamma, Theta, Vega, Rho); put-call parity |
| Clearing, Settlement and Risk Management | 10% | Mark to Market (MTM) margin; SPAN margin; initial margin; extreme loss margin; settlement price; clearing member roles |
| Regulatory Framework | 10% | SEBI and RBI guidelines; FEMA regulations; eligible participants; position limits; reporting requirements |
Chapter-by-Chapter: High-Priority Topics for NISM Series I Mock Test
Each chapter in the NISM Series I workbook tests both conceptual understanding and numerical calculation ability. The topics below represent the highest question frequency across all practice sets and previous NISM exam cycles.
Introduction to Foreign Exchange Markets
Foreign exchange market structure questions test your understanding of how spot, forward, and derivative markets relate to each other. Key areas include:
- Interest Rate Parity (IRP): The relationship between two countries’ interest rates and their forward exchange rates; covered IRP formula is F = S × (1 + r_d) / (1 + r_f)
- Purchasing Power Parity (PPP): The theory that exchange rates adjust to equalize price levels across countries over the long run
- FBIL Reference Rate: Financial Benchmarks India Pvt Ltd publishes the daily USDINR reference rate used as the final settlement price for all INR currency futures and options contracts
- Spot vs forward rates: The difference between rates for immediate delivery (spot) and rates for delivery on a future date (forward); forward premium and discount calculations
- Cross rates: Calculating EURINR or GBPINR from EURUSD and USDINR spot rates
Exchange Traded Currency Futures
Currency futures questions test contract specifications, lot sizes, tick sizes, and pricing formulas for all 4 currency pairs traded on NSE and BSE.
| Currency Pair | Lot Size | Tick Size | Settlement Price |
|---|---|---|---|
| USDINR | 1,000 USD | 0.25 paise (Rs. 0.0025) | FBIL reference rate on expiry date |
| EURINR | 1,000 EUR | 0.25 paise (Rs. 0.0025) | FBIL EUR/INR reference rate |
| GBPINR | 1,000 GBP | 0.25 paise (Rs. 0.0025) | FBIL GBP/INR reference rate |
| JPYINR | 100,000 JPY | 0.25 paise (Rs. 0.0025) | FBIL JPY/INR reference rate |
- Cost of carry pricing model: Fair futures price = Spot price × e^(r – rf) × T where r is domestic interest rate, rf is foreign interest rate, and T is time to expiry
- Expiry date: Last working day of the expiry month (except for USDINR which expires 2 days before the last working day)
- Contract months: Up to 12 near months for USDINR; up to 3 near months for cross-currency pairs
Exchange Traded Currency Options
Currency options questions in NISM Series I test Option Greeks, intrinsic and time value calculations, and put-call parity.
- Intrinsic value of a call option: Maximum of (Spot price minus Strike price) or zero; an option with positive intrinsic value is In-the-Money (ITM)
- Time value: Option premium minus intrinsic value; decays as expiry approaches (measured by Theta)
- Delta: Rate of change of option price per 1-unit change in underlying price; call delta ranges from 0 to 1; put delta ranges from 0 to minus 1
- Gamma: Rate of change of Delta; highest for At-the-Money (ATM) options near expiry
- Theta: Time decay of option value per day; always negative for option buyers
- Vega: Sensitivity of option price to a 1% change in implied volatility
- Put-call parity: C minus P = S minus PV(X) where C is call price, P is put price, S is spot price, and PV(X) is present value of strike price
Strategies Using Currency Derivatives
Strategy questions present real-world scenarios where an Indian exporter, importer, or corporate treasurer needs to hedge foreign exchange risk.
- Exporter hedging: An exporter expecting USD receivables sells USDINR futures to lock in the current rate; protects against rupee appreciation
- Importer hedging: An importer expecting USD payables buys USDINR futures; protects against rupee depreciation
- Long call strategy: Buy call option to benefit from rupee depreciation while limiting loss to the premium paid
- Covered call: Hold underlying position and sell call options to generate premium income; caps upside profit
- Protective put: Buy put options to protect an existing currency exposure from adverse moves
- Arbitrage between forward and futures: Exploit price differences between OTC forward market and exchange-traded futures; NISM tests the cash-and-carry arbitrage calculation specifically
Clearing, Settlement and Risk Management
Margin and settlement questions require precise formula application under timed conditions.
- Mark to Market (MTM) margin: Daily settlement of gains and losses based on closing futures price versus previous day’s closing price; MTM = (Today’s closing price minus Previous closing price) × Lot size × Number of lots
- Initial margin: Collected upfront based on SPAN (Standard Portfolio Analysis of Risk) methodology; covers potential losses under extreme market conditions
- Extreme loss margin: An additional margin over SPAN to cover tail risk events; calculated as a percentage of the open position value
- Final settlement: Cash settled against the FBIL reference rate on the expiry date; no physical delivery of foreign currency occurs
- Clearing members and trading members: Clearing members hold the settlement obligation; trading members access the market through clearing members
Regulatory Framework
Regulatory questions test SEBI and RBI rules that govern who can participate in exchange-traded currency derivatives and in what volumes.
- Eligible participants: Residents of India including individuals, companies, banks, and foreign portfolio investors (FPIs) subject to RBI permission
- Position limits: Trading member position limits, client-wise position limits, and near-month concentration limits set by SEBI and the exchanges
- FEMA regulations: Foreign Exchange Management Act governs cross-border currency transactions; NISM questions test which FEMA provisions apply to hedging using derivatives
- Reporting requirements: Large open position reporting obligations for trading and clearing members above threshold limits
Key Formulas Tested in NISM Series I Currency Derivatives Mock Tests
At least 15 to 20 questions in every NISM Series I paper require direct formula application. Memorise these formulas before attempting full-length mock tests.
- Forward rate using IRP: F = S × (1 + r_domestic) / (1 + r_foreign)
- Futures fair value (cost of carry): F = S × (1 + r_d minus r_f) × T/365
- MTM gain or loss: (Settlement price minus Previous settlement price) × Lot size × Number of contracts
- Option intrinsic value (call): Max (S minus X, 0)
- Option intrinsic value (put): Max (X minus S, 0)
- Put-call parity: C minus P = S minus X / (1 + r)^T
- Tick value: Tick size × Lot size; for USDINR = Rs. 0.0025 × 1000 = Rs. 2.50 per contract
Negative Marking Strategy for NISM Series I
4 wrong answers cancel exactly 1 correct answer under the NISM Series I 0.25 negative marking rule. Apply this decision framework in every mock test session.
- Confident in the answer: Attempt without hesitation
- Can eliminate 2 of 4 options: Attempt; the 50% chance on 2 remaining options gives a net positive expected score
- Cannot eliminate any option: Skip; guessing from 4 equal choices produces a net expected loss of 0.0625 marks per attempt
- Target score in mock tests: Attempt 80 to 88 questions with 78% accuracy to net above 62 marks after negative marking deductions
Who Needs the NISM Series I Currency Derivatives Certificate
SEBI mandates the NISM Series I certificate for all individuals working in the currency derivatives segment of Indian stock exchanges.
- Approved users of trading members: All front-office staff who access the currency derivatives trading terminal at NSE or BSE must hold this certification
- Sales personnel: Bank and brokerage staff who advise clients on currency derivative products require the certificate for regulatory compliance
- Forex treasury professionals: Individuals at banks and corporates who use exchange-traded currency derivatives for hedging purposes
- Currency brokers and sub-brokers: All intermediaries in the currency derivatives market covered under SEBI’s intermediary regulations
- Mutual fund distributors adding forex products: Distributors who recommend currency ETFs or funds using derivatives as underlying instruments
5 Mistakes That Prevent First-Attempt NISM Series I Qualification
These errors appear consistently in NISM Series I failure patterns and each one costs 5 to 15 marks directly.
- Skipping the FBIL reference rate topic: Every NISM Series I paper has 4 to 6 questions on how the FBIL rate is used for final settlement; candidates who prepare only trading concepts and miss settlement mechanics consistently fall just below 60 marks
- Confusing lot sizes across currency pairs: USDINR, EURINR, and GBPINR each have a lot size of 1,000 units but JPYINR has a lot size of 100,000 units; calculation errors from using the wrong lot size produce wrong MTM and margin answers
- Attempting all 100 questions without selective skipping: Random guessing on 15 uncertain questions deducts 3.75 marks net even if 5 happen to be correct; selective skipping of low-confidence questions consistently produces higher scores than blind attempting
- Practising theory without formula drills: At least 15 to 20 questions require direct formula application under time pressure; candidates who read the NISM workbook without practising numerical problems score well below 60 even with strong conceptual knowledge
- Ignoring FEMA and regulatory questions: The regulatory framework chapter carries 10% weightage; candidates who focus only on trading and pricing topics leave 10 marks on the table from questions that require only regulatory fact recall
21-Day NISM Series I Mock Test Practice Plan
This plan builds chapter accuracy in Weeks 1 and 2 and full exam speed in Week 3.
Week 1: Conceptual Foundation (Days 1 to 7)
- Days 1 to 2: Read Forex market chapter and attempt 20-question chapter mock test; focus on IRP formula and FBIL rate; target 70% accuracy
- Days 3 to 4: Study currency futures contract specs and cost of carry pricing; attempt futures chapter test; memorise all 4 currency pair lot sizes
- Days 5 to 6: Study options chapter; practise Delta, Theta, and intrinsic value calculations with 15 numerical problems daily
- Day 7: Full 100-question NISM Series I mock test under strict 120-minute timer; record chapter-wise accuracy and net score
Week 2: Strategy and Regulation (Days 8 to 14)
- Days 8 to 9: Study hedging strategies for exporters, importers, and arbitrageurs; practice 5 scenario-based strategy questions daily
- Days 10 to 11: Study clearing, settlement, and margin chapter; practise MTM and SPAN margin calculations until each takes under 60 seconds
- Days 12 to 13: Study regulatory framework; memorise SEBI position limits, FEMA provisions, and eligible participant categories
- Day 14: Second full mock test; compare chapter-wise accuracy with Week 1 results; identify the 2 lowest-scoring chapters for extra revision
Week 3: Full Exam Simulation (Days 15 to 21)
- Attempt 1 full NISM Series I mock test every alternate day under strict 120-minute conditions
- After each test: review every wrong answer, identify the specific formula or rule misapplied, and revise that concept the next morning
- Target by Day 21: Consistent net score above 68 marks with attempt rate of 82 to 88 questions per test
NISM Series I Currency Derivatives Mock Test: Frequently Asked Questions
The NISM Series I Currency Derivatives exam has 100 MCQs to be completed in 120 minutes with 0.25 negative marking per wrong answer. Passing requires at least 60 correct marks out of 100 after negative marking deductions. The National Institute of Securities Markets conducts this exam at authorised test centres across India and through remote proctoring on the NISM portal at nism.ac.in.
NISM Series I covers 4 currency pairs traded on Indian exchanges: USDINR, EURINR, GBPINR, and JPYINR. USDINR is the most heavily tested pair and carries the most questions on contract specifications, pricing, and settlement. JPYINR has a different lot size of 100,000 JPY compared to 1,000 units for the other 3 pairs, and this difference appears frequently in numerical questions.
The final settlement price for all NISM Series I currency derivatives contracts is the FBIL reference rate published by Financial Benchmarks India Pvt Ltd on the expiry date. FBIL replaced the earlier RBI reference rate system for this purpose. All currency futures and options contracts settle in cash against this FBIL rate; there is no physical delivery of foreign currency on expiry.
The NISM Series I Currency Derivatives certificate is valid for 3 years from the date of passing the examination. After 3 years, holders must appear for the exam again to renew their certification. SEBI-registered intermediaries must maintain valid NISM certifications for all approved users and sales personnel in the currency derivatives segment.
Attempt at least 10 full-length NISM Series I Currency Derivatives mock tests before your actual exam date. Complete the first 3 to 5 tests after finishing the NISM workbook to identify weak chapters. Space the remaining tests 2 to 3 days apart with formula revision between attempts. Candidates who complete 8 or more full mock tests consistently score above 70 marks in the actual NISM Series I exam.
