Important Points for IC 99 - Asset Management Exam
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The participants in the forex market include : Banks, Central Banks and Governments, non-banking entities, hedge funds, investment bankers, retail foreign exchange traders, non-banking financial companies and money transfer companies.
The statutory framework for administration of foreign exchange in India is the Foreign Exchange Management Act, 1999. The Forex market in India is regulated by Reserve Bank of India.
The International Standard Organisation (ISO) has devised the codes and symbols for currencies of various countries for being used by SWIFT network in the international bank transactions.
In Forex, when one currency in a pair is rising in value, the other currency is declining, and vice versa. If a trader thinks a currency pair will fall he will sell it and hope to buy it back later at a lower price. This is considered a short position, which is the opposite of a long position.
A spot exchange rate is a rate at which currencies are being traded for delivery on the same day. A forward contract is a contract to convert rupee into dollars at a future date at a set price.
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