NISM-Series-I: Currency Derivatives Certification Exam Notes

Page 8 Of 30

Go to:

  • According to RBI guidelines, any resident Indian desiring to book a forward contract should have an underlying trade contract which could establish exposure to foreign currency. The amount and tenor of the contract booked must be equal to or less than the amount and tenor of foreign exchange exposure.
  • For JPYINR, the market convention is to quote price of 100 JPY in terms of INR. In all other pairs mentioned above, the convention is price of 1 unit of base currency in terms of quotation currency
  • Gross Domestic Product (GDP) represents the total market value of all goods and services produced in a country during a given year. A GDP growth rate higher than expected may mean relative strengthening of the currency of that country, assuming everything else remaining the same.
  • The Index of Industrial Production (IIP) shows the changes in the production in the industrial sector of an economy in a given period of time, in comparison with a fixed reference point in the past. In India, the fixed reference point is 2011-12 and the IIP numbers are reported using 2011-12 as the base year for comparison.
  • CPI is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is a price index that tracks the prices of a specified basket of consumer goods and services, providing a measure of inflation. CPI is a fixed quantity price index and considered by some a cost of living index.

NISM Currency Derivatives

Copyright 2015 - MODELEXAM MODELEXAM®