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INSTITUTE FOR TECHNOLOGY & MANAGEMENT

PGDMFM 2012-2014 (1st Year

TERM-I (Sept.) EXAMINATION

Subject: Forex Markets

Date: !-"#-"$

T%&e: (Max 2hrs) Marks :'"

Istruct%os :

$. art-A %s co&pu*sor+. Atte&pt a+ t,ree uest%os ro& art-/ 0 a+ t1o ro& art-2

. T,e as1ers s,ou*3 be spec%%c to t,e uest%o

4. Appropr%ate exa&p*es s,ou*3 be 5%6e 1,ere6er ecessar+.

7. *ease 1r%te 3o1 t,e uest%o u&ber o t,e as1er s,eet beore atte&pt%5 %t.

ART-A

( $ Mark or eac, uest%o)

1. Suppose RBI pursue a tight monetary policy. All else being equal, theimpact of this policy was to __________ interest rates in the Indiarelatie to those in !SA and cause the dollar to __________

against I"R.

a. #ecrease, depreciateb. #ecrease, appreciatec. Increase, depreciate

d. Increase, appreciate

$. %he spot !S#I"R bid and as& rate is gien as '(.)1$*+'(.)1*. If the * month+bid+as& in points are )*+'$, then what would be I"R!S# * month rate in outrightquotations.

a. '(.)(+'(.)--b. .$1'+.$1)c. .$1)+.$1'd."one of these.

*. A depreciation of the I"R refers to a an/0a/ all in the I"R price of foreign currency

b/ Increase in the I"R price of foreign currencyc/ 2oss of foreign+e3change reseres for the India.d/"one of these

'. Suppose spot !S#4I"R is '5.() ad 1 year !S interest rate is )6while it is 116 in India. %he 1 year !S#4I"R forward rate is

a. '$.$$b. '$.$7c. '7.'$d. "one of these.

Strictly Confidential 1

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INSTITUTE FOR TECHNOLOGY & MANAGEMENT

PGDMFM 2012-2014 (1st Year

ART-/

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a. Nostro 0 ostro Accoutsb. D%eret ore%5 exc,a5e sett*e&et &o3esc. Exp*a% ore%5 exc,a5e &arket; &arket part%c%pats 0 Fore%5 exc,a5e Market

Trasact%o T+pes( $" )

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INSTITUTE FOR TECHNOLOGY & MANAGEMENT

PGDMFM 2012-2014 (1st Year

Q.8 %he following table, lists the actual ratesforward contracts rates for/ different

maturities. rom these rates, calculate the cross rates.

Outright Quotations for USD/INR and USD/ZAR(*)!S#I"R !S#RA"#

Bid Rate As& Rate Bid Rate As& RateSpot '(.($) '(.(') (.)7*( (.)7)

1 wee& '(.() '(.(() (.)71- (.)7*- $ wee&s '(.(7) '(.-*) (.)--( (.)711 1 month '(.-' '(.-7 (.)-1$ (.)-5 $ months '(.7 '(.75) (.)(() (.)-*-

Q. 9 4!S#/ 1.5 1.51Ban& B 4