Home › JAIIB › AFM › Unit 23

JAIIB · Accounting & Financial Management · Module C — Financial Management

JAIIB AFM Unit 23 — Financial Mathematics - Forex Arithmetic: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 3 of the November 2026 cycle (28 November 2026)

This page is a free slice of our JAIIB AFM question bank for Unit 23 — Financial Mathematics - Forex Arithmetic (Module C — Financial Management). The Mock Centre holds 30 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

AFM · Module C30 MCQs in the Mock Centre5 free belowPaper on 28 November 2026

Key facts examiners test from this unit

  1. Direct quote = home currency per unit of foreign (USD 1 = Rs.75, for an Indian); indirect = foreign per unit of home; the two are RECIPROCALS (Rs.80/USD → USD 0.0125/Re).
  2. India uses DIRECT quotes since 2 AUGUST 1993 (post-LERMS reforms).
  3. Today's rupee rate is MARKET-determined (demand-supply), with RBI intervening only to curb volatility.

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
For an Indian, the quote 'USD 1 = ₹75' is a:
Why (b): USD 1 = ₹75 fixes ONE unit of the FOREIGN currency against variable home currency — a DIRECT quote for an Indian.
Question 2 of 5
The relationship between direct and indirect quotes is:
Why (b): Indirect = 1 ÷ direct (and vice versa) — the same price seen from the other side.
Question 3 of 5
CASH/READY settlement means the exchange of currencies on:
Why (a): CASH/READY = settlement the SAME day as the deal.
Question 4 of 5
The forward rate is derived as:
Why (a): The forward rate is derived as SPOT ± FORWARD POINTS — add the premium or subtract the discount from the spot rate.
Question 5 of 5
An exporter receives EUR 50,000. EUR 1 = USD 1.0850 and USD 1 = Rs 83.00. The rupee realisation is closest to:
Why (a): EUR 1 = 1.0850 × 83.00 = Rs 90.0655; 50,000 × 90.0655 = Rs 45,03,275.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Direct quoteIndirect quoteRupees per dollar vs dollars per rupee (reciprocals)
CASH/READYTOMSame-day vs next-working-day settlement
Practise all 30 questions on Unit 23. The free demo opens a slice of every subject with the same explanations; the AFM Online-only pass unlocks all 1,681 AFM questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
Take the free test Open the free demo

← Unit 22: Financial Mathematics - Calculation of YTM · Unit 24: Capital Structure and Cost of Capital → · All AFM units · JAIIB 2026 guide

Related reading

Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.