A Project on ANALYTICAL STUDY ON CURRENCY DERIVATIVES IN INDIA (Submitted in partial fulfillment of the requirement of Master of Business Administration, Distance Education Guru Jambheshwar University of Science & Technology , Hisar Research Supervisor: Submitted by : Lavnish jaitly Mr. Nikhil Kulshrestha Enrolment No.08061148429 (Associate Prof.) Specialization :- FINANCE NSB Session 2008-10 Directorate of Distance Education Guru Jambheshwar University of Science & Technology Hisar (India) [Project report on Currency Derivatives] IBMR-Ahmedabad Page 1
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A Project on ANALYTICAL STUDY ON CURRENCY DERIVATIVES IN
INDIA
(Submitted in partial fulfillment of the requirement of Master of Business Administration, Distance Education
Guru Jambheshwar University of Science & Technology , Hisar
Research Supervisor: Submitted by : Lavnish jaitly Mr. Nikhil Kulshrestha Enrolment No.08061148429 (Associate Prof.) Specialization :- FINANCE NSB
Session 2008-10 Directorate of Distance Education
Guru Jambheshwar University of Science & Technology Hisar (India)
[Project report on Currency Derivatives] IBMR-Ahmedabad Page 1
CERTIFICATE
This is to certify that MR LAVNISH JAITLY, Enrolment No. 08061148429 has preceded under by supervision her Research Project Report on “ANALYTICAL STUDY ON CURRENCY DERIVATIVE IN INDIA” in the specialization area “FINANCE.”
The work embodied in this report is original and is of the standard expected of an MBA student and has not been submitted in part or full to this or any other university for the award of any degree or diploma. She has completed all requirements of guidelines for Research Project Report and the work is fit for evaluation.
[Project report on Currency Derivatives] IBMR-Ahmedabad Page 2
DECLARATION
This is to certify that the project Report entitled “ANALYTICAL STUDY ON CURRENCY DERIVATIVE IN INDIA” is an original work and has not been submitted is part or full to this or any other university/institution the award of any degree or diploma.
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1) Introduction
2) Objectives of the study
3) Literature review & problem formulationi) History and Development of Currency Derivative ii) Brief overview of foreign exchange market.iii) Rationale for Introducing Currency Futures
4) Research methodology
5) Analysis & Interpretation
6) Key findings
7) Suggestion
8) Limitation of the study
9) Annexture
10)Biblioagraphy
INTRODUCTION
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Each country has its own currency through which both national and
international transactions are performed. All the inter national
business transactions involve an exchange of one currency for
another.
The foreign exchange markets of a country provide the mechanism of
exchanging different currencies with one and another, and thus,
facilitating transfer of purchasing power from one country to
another .
With the multiple growths of international trade and finance all
over the world, trading in foreign currencies has grown
tremendously over the past several decades.
Since the exchange rates are continuously changing, so the firms are
exposed to the risk of exchange rate movements. As a result the
assets or liability or cash flows of a firm which are denominated in
foreign currencies undergo a change in value over a period of time
due to variation in exchange rates.
This variability in value of assets or liabilities or cash flows is
referred to exchange rate risk. Since the fixed exchange rate
system has been fallen in the early
1970s, specifically in developed countries, the currency risk has
become substantial for many business fir ms that was the reason
behind development of currency derivatives.
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Each country has its own currency through which both national and international
transactions are performed. All the international business transactions involve an
exchange of one currency for another.
For example,
If any Indian firm borrows funds from international financial market in US dollars
for short or long term then at maturity the same would be refunded in particular agreed
currency along with accrued interest on borrowed money. It means that the borrowed
foreign currency brought in the country will be converted into Indian currency, and when
borrowed fund are paid to the lender then the home currency will be converted into foreign
lender’s currency. Thus, the currency units of a country involve an exchange of one
currency for another. The price of one currency in terms of other currency is known as
exchange rate.
The foreign exchange markets of a country provide the mechanism of exchanging different
currencies with one and another, and thus, facilitating transfer of purchasing power from
one country to another.
With the multiple growths of international trade and finance all over the world, trading in
foreign currencies has grown tremendously over the past several decades. Since the
exchange rates are continuously changing, so the firms are exposed to the risk of
exchange rate movements. As a result the assets or liability or cash flows of a firm which
are denominated in foreign currencies undergo a change in value over a period of time
due to variation in exchange rates.
This variability in the value of assets or liabilities or cash flows is referred to exchange rate
risk. Since the fixed exchange rate system has been fallen in the early 1970s, specifically
in developed countries, the currency risk has become substantial for many business firms.
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OBJECTIVES OF STUDY
The primary objective of the study is first to gain some practical knowledge
regarding the functioning of Currency Derivatives and how are they traded in the
market. Also it is necessary to understand there primary functions and knowledge about
various future derivatives instruments.
The other objectives were:
To study the Importance of Currency Derivatives.
To study the role of working of future and options market.
To study the process and functions of Currency Derivatives .To explore the
methodology and types of Derivatives provided in India.
To study the purpose, process, principle, functions of the Currency Derivatives.
To study the different types of methods/techniques used to evaluate them.
To study the level of evaluations.
know the challenges which are faced in present market scenario.
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Literature review and problem formulation
INTRODUCTION TO FINANCIAL DERIVATIVES
“By far the most significant event in finance during the past decade has been the
extraordinary development and expansion of financial derivatives…These instruments
enhances the ability to differentiate risk and allocate it to those investors most able and
willing to take it- a process that has undoubtedly improved national productivity growth and
standards of livings.”
Alan Greenspan , Former Chairman
US Federal Reserve Bank
The past decades has witnessed the multiple growths in the volume of international trade
and business due to the wave of globalization and liberalization all over the world. As a
result, the demand for the international money and financial instruments increased
significantly at the global level. In this respect, changes in the interest rates, exchange rate
and stock market prices at the different financial market have increased the financial risks
to the corporate world.
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**DEFINITION OF FINANCIALDERIVATIVES**
A word formed by derivation. It means, this word has been arisen by derivation.
Something derived; it means that some things have to be derived or arisen out of the
underlying variables. A financial derivative is an indeed derived from the financial
market.
Derivatives are financial contracts whose value/price is independent on the behavior
of the price of one or more basic underlying assets. These contracts are legally
binding agreements, made on the trading screen of stock exchanges, to buy or sell an
asset in future. These assets can be a share, index, interest rate, bond, rupee dollar
exchange rate, sugar, crude oil, soybeans, cotton, coffee and what you have.
A very simple example of derivatives is curd, which is derivative of milk. The price of
curd depends upon the price of milk which in turn depends upon the demand and
supply of milk.
The Underlying Securities for Derivatives are :
Commodities: Castor seed, Grain, Pepper, Potatoes, etc.
Precious Metal : Gold, Silver
Short Term Debt Securities : Treasury Bills
Interest Rates
Common shares/stock
Stock Index Value : NSE Nifty
Currency : Exchange Rate
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TYPES OF FINANCIAL DERIVATIVES
Financial derivatives are those assets whose values are determined by the value of some
other assets, called as the underlying. Presently there are Complex varieties of
derivatives already in existence and the markets are innovating newer and newer ones
continuously. For example, various types of financial derivatives based on their different
properties like, plain, simple or straightforward, composite, joint or hybrid, synthetic,
leveraged, mildly leveraged, OTC traded, standardized or organized exchange traded,
etc. are available in the market. Due to complexity in nature, it is very difficult to classify
the financial derivatives, so in the present context, the basic financial derivatives which
are popularly in the market have been described. In the simple form, the derivatives can
be classified into different categories which are shown below :
DERIVATIVES
Financials Commodities
Basics Complex
1. Forwards 1. Swaps
2. Futures 2.Exotics (Non STD)
3. Options
4. Warrants and Convertibles
One form of classification of derivative instruments is between commodity derivatives and
financial derivatives. The basic difference between these is the nature of the underlying
instrument or assets. In commodity derivatives, the underlying instrument is commodity
which may be wheat, cotton, pepper, sugar, jute, turmeric, corn, crude oil, natural gas,
gold, silver and so on. In financial derivative, the underlying instrument may be treasury
bills, stocks, bonds, foreign exchange, stock index, cost of living index etc. It is to be
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noted that financial derivative is fairly standard and there are no quality issues whereas in
commodity derivative, the quality may be the underlying matters.
Another way of classifying the financial derivatives is into basic and complex. In this,
forward contracts, futures contracts and option contracts have been included in the basic
derivatives whereas swaps and other complex derivatives are taken into complex category
because they are built up from either forwards/futures or options contracts, or both. In
fact, such derivatives are effectively derivatives of derivatives.
Derivatives are traded at organized exchanges and in the Over The Counter
( OTC ) market :
Derivatives Trading Forum
Organized Exchanges Over The Counter
Commodity Futures Forward Contracts
Financial Futures Swaps
Options (stock and index)
Stock Index Future
Derivatives traded at exchanges are standardized contracts having standard delivery
dates and trading units. OTC derivatives are customized contracts that enable the parties
to select the trading units and delivery dates to suit their requirements.
A major difference between the two is that of counterparty risk—the risk of default by
either party. With the exchange traded derivatives, the risk is controlled by exchanges
through clearing house which act as a contractual intermediary and impose margin
requirement. In contrast, OTC derivatives signify greater vulnerability.
DERIVATIVES INTRODUCTION IN INDIA[Project report on Currency Derivatives] IBMR-Ahmedabad Page 11
The first step towards introduction of derivatives trading in India was the promulgation of
the Securities Laws (Amendment) Ordinance, 1995, which withdrew the prohibition on
options in securities. SEBI set up a 24 – member committee under the chairmanship of
Dr. L.C. Gupta on November 18, 1996 to develop appropriate regulatory framework for
derivatives trading in India, submitted its report on March 17, 1998. The committee
recommended that the derivatives should be declared as ‘securities’ so that regulatory
framework applicable to trading of ‘securities’ could also govern trading of derivatives.
To begin with, SEBI approved trading in index futures contracts based on S&P CNX Nifty
and BSE-30 (Sensex) index. The trading in index options commenced in June 2001 and
the trading in options on individual securities commenced in July 2001. Futures contracts
on individual stocks were launched in November 2001.
HISTORY OF CURRENCY DERIVATIVES
Currency futures were first created at the Chicago Mercantile Exchange (CME) in 1972.The
contracts were created under the guidance and leadership of Leo Melamed, CME Chairman
Emeritus. The FX contract capitalized on the U.S. abandonment of the Bretton Woods
agreement, which had fixed world exchange rates to a gold standard after World War II. The
abandonment of the Bretton Woods agreement resulted in currency values being allowed to
float, increasing the risk of doing business. By creating another type of market in which
futures could be traded, CME currency futures extended the reach of risk management
beyond commodities, which were the main derivative contracts traded at CME until then. The
concept of currency futures at CME was revolutionary, and gained credibility through
endorsement of Nobel-prize-winning economist Milton Friedman.
Today, CME offers 41 individual FX futures and 31 options contracts on 19 currencies, all of
which trade electronically on the exchange’s CME Globex platform. It is the largest regulated
marketplace for FX trading. Traders of CME FX futures are a diverse group that includes
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3. Present Findings – usually involves some form of sorting analysis and/or presentation
There are two methods of data collection which are discussed below:
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DATA COLLECTION
Primary Data Secondary Data(Data collection techniques)
Questionnaire Interview External Internet Intrenal Source source
PRIMARY DATAIn primary data collection, you collect the data yourself using methods such as
interviews and questionnaires. The key point here is that the data you collect is
unique to you and your research and, until you publish, no one else has access
to it.
I have tried to collect the data using methods such as interviews and
questionnaires. The key point here is that the data collected is unique and
research and, no one else has access to it. It is done to get the real scenario and
to get the original data of present.
DATA COLLECTION TECHNIQUE
Questionnaire:Questionnaire are a popular means of collecting data, but are difficult to design
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and often require many rewrites before an acceptable questionnaire is
produced. The features included in questionnaire are:
· Theme and covering letter· Instruction for completion· Types of questions· Length
Interview:
This technique is primarily used to gain an understanding of the underlying
reasons and motivations for people’s attitudes, preferences or behavior. The
interview was done by asking a general question. I encourage the respondent to
talk freely. I have used an unstructured format, the subsequent direction of the
interview being determined by the respondent’s initial reply, and come to know
what is its initial problem is.
SAMPLING METHODOLOGY
Sampling technique:
Initially, a rough draft was prepared keeping in mind the objective of the
research. A pilot study was done in order to know the accuracy of the
questionnaire. The final questionnaire was arrived only after certain important
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changes were done. Thus my sampling came out to be judgmental and
continent.
Sampling Unit:
The respondents who were asked to fill out questionnaires are the sampling
units.
Sampling Size: 20SECONDARY DATA
All methods of data collection can supply quantitative data (numbers, statistics
or financial) or qualitative data (usually words or text). Quantitative data may
often be presented in tabular or graphical form. Secondary data is data that has
already been collected by someone else for a different purpose to yours.
Need of using secondary data
1. Data is of use in the collection of primary data.
2. They are one of the cheapest and easiest means of access to information.
3. Secondary data may actually provided enough information to resolve the Problem being investigated.
4. Secondary data can be a valuable source of new ideas that can be explored later through primary research.
Limitation of secondary data
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1. May be outdated.
2. No control over data collection.
3. May not be reported in the required form.
4. May not be reported in the required form.
5. May not be very accurate.
6. Collection for some other purpose.
ANALYSIS
INTEREST RATE PARITY PRINCIPLE
For currencies which are fully convertible, the rate of exchange for any date other than
spot is a function of spot and the relative interest rates in each currency. The assumption
is that, any funds held will be invested in a time deposit of that currency. Hence, the
forward rate is the rate which neutralizes the effect of differences in the interest rates in
both the currencies. The forward rate is a function of the spot rate and the interest rate
differential between the two currencies, adjusted for time. In the case of fully convertible
currencies, having no restrictions on borrowing or lending of either currency the forward
rate can be calculated as follows;
Future Rate = (spot rate) {1 + interest rate on home currency * period} /
{1 + interest rate on foreign currency * period}
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For example,
Assume that on January 10, 2002, six month annual interest rate was 7
percent p.a. on Indian rupee and US dollar six month rate was 6 percent p.a. and spot
( Re/$ ) exchange rate was 46.3500. Using the above equation the theoretical future
price on January 10, 2002, expiring on June 9, 2002 is : the answer will be Rs.46.7908
per dollar. Then, this theoretical price is compared with the quoted futures price on
January 10, 2002 and the relationship is observed.
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PRODUCT DEFINITIONS OF CURRENCY
FUTURE ON NSE/BSE
Underlying
Initially, currency futures contracts on US Dollar – Indian Rupee (US$-INR) would
be permitted.
Trading Hours
The trading on currency futures would be available from 9 a.m. to 5 p.m.
Size of the contrac t
The minimum contract size of the currency futures contract at the time of
introduction would be US$ 1000. The contract size would be periodically aligned to
ensure that the size of the contract remains close to the minimum size.
Quotation
The currency futures contract would be quoted in rupee terms. However, the
outstanding positions would be in dollar terms.
Tenor of the contract
The currency futures contract shall have a maximum maturity of 12 months.
Available contracts
All monthly maturities from 1 to 12 months would be made available.
Settlement mechanism
The currency futures contract shall be settled in cash in Indian Rupee.
Settlement price
The settlement price would be the Reserve Bank Reference Rate on the date of
expiry. The methodology of computation and dissemination of the Reference Rate
may be publicly disclosed by RBI.
Final settlement day
The currency futures contract would expire on the last working day (excluding
Saturdays) of the month. The last working day would be taken to be the same as
that for Interbank Settlements in Mumbai. The rules for Interbank Settlements,
including those for ‘known holidays’ and ‘subsequently declared holiday’ would be
those as laid down by FEDAI.
The contract specification in a tabular form is as under:
Underlying Rate of exchange between one USD and
INR
Trading Hours
(Monday to Friday)
09:00 a.m. to 05:00 p.m.
Contract Size USD 1000
Tick Size 0.25 paisa or INR 0.0025
Trading Period Maximum expiration period of 12 months
Contract Months 12 near calendar months
Final Settlement date/
Value date
Last working day of the month (subject to
Holiday calendars)
Last Trading Day Two working days prior to Final Settlement
DateSettlement Cash settled
48
Final Settlement Price The reference rate fixed by RBI two
working days prior to the final settlement
date will be used for final settlement
CURRENCY FUTURES PAYOFFS
A payoff is the likely profit/loss that would accrue to a market participant with
change in the price of the underlying asset. This is generally depicted in the form of
payoff diagrams which show the price of the underlying asset on the X-axis and the
profits/losses on the Y-axis. Futures contracts have linear payoffs. In simple words,
it means that the losses as well as profits for the buyer and the seller of a futures
contract are unlimited. Options do not have linear payoffs. Their pay offs are non-
linear. These linear payoffs are fascinating as they can be combined with options
and the underlying to generate various complex payoffs. However, currently only
payoffs of futures are discussed as exchange traded foreign currency options are
not permitted in India.
Payoff for buyer of futures: Long futures
The payoff for a person who buys a futures contract is similar to the payoff for a
person who holds an asset. He has a potentially unlimited upside as well as a
potentially unlimited downside. Take the case of a speculator who buys a two-
month currency futures contract when the USD stands at say Rs.43.19. The
underlying asset in this case is the currency, USD. When the value of dollar moves
up, i.e. when Rupee depreciates, the long futures position starts making profits, and
when the dollar depreciates, i.e. when rupee appreciates, it starts making losses.
Figure 4.1 shows the payoff diagram for the buyer of a futures contract.
49
Payoff for buyer of future:
The figure shows the profits/losses for a long futures position. The investor bought futures when the USD was at Rs.43.19. If the price goes up, his futures position starts making profit. If the price falls, his futures position starts showing losses.
Payoff for seller of futures: Short futures
The payoff for a person who sells a futures contract is similar to the payoff for a
person who shorts an asset. He has a potentially unlimited upside as well as a
potentially unlimited downside. Take the case of a speculator who sells a two month
currency futures contract when the USD stands at say Rs.43.19. The underlying
PROFIT
LOSS
USDD
0
43.19
50
asset in this case is the currency, USD. When the value of dollar moves down, i.e.
when rupee appreciates, the short futures position starts 25 making profits, and
when the dollar appreciates, i.e. when rupee depreciates, it starts making losses.
The Figure below shows the payoff diagram for the seller of a futures contract.
Payoff for seller of future:
The figure shows the profits/losses for a short futures position. The investor sold
futures when the USD was at 43.19. If the price goes down, his futures position
starts making profit. If the price rises, his futures position starts showing losses
PROFIT
LOSS
USDD
0
43.19
51
PRICING FUTURES – COST OF CARRY
MODEL
Pricing of futures contract is very simple. Using the cost-of-carry logic, we calculate
the fair value of a futures contract. Every time the observed price deviates from the
fair value, arbitragers would enter into trades to capture the arbitrage profit. This in
turn would push the futures price back to its fair value.
The cost of carry model used for pricing futures is given below:
F=Se^(r-rf)T
where:
r=Cost of financing (using continuously compounded interest rate)
rf= one year interest rate in foreign
T=Time till expiration in years
E=2.71828
The relationship between F and S then could be given as
F Se^(r rf )T - =
This relationship is known as interest rate parity relationship and is used in
international finance. To explain this, let us assume that one year interest rates in
US and India are say 7% and 10% respectively and the spot rate of USD in India is
Rs. 44.
From the equation above the one year forward exchange rate should be
F = 44 * e^(0.10-0.07 )*1=45.34
52
It may be noted from the above equation, if foreign interest rate is greater than the
domestic rate i.e. rf > r, then F shall be less than S. The value of F shall decrease
further as time T increase. If the foreign interest is lower than the domestic rate, i.e.
rf < r, then value of F shall be greater than S. The value of F shall increase further
as time T increases.
HEDGING WITH CURENCY FUTURES
Exchange rates are quite volatile and unpredictable, it is possible that anticipated
profit in foreign investment may be eliminated, rather even may incur loss. Thus, in
order to hedge this foreign currency risk, the traders’ oftenly use the currency
futures. For example, a long hedge (I.e.., buying currency futures contracts) will
protect against a rise in a foreign currency value whereas a short hedge (i.e., selling
currency futures contracts) will protect against a decline in a foreign currency’s
value.
It is noted that corporate profits are exposed to exchange rate risk in many situation.
For example, if a trader is exporting or importing any particular product from other
countries then he is exposed to foreign exchange risk. Similarly, if the firm is
borrowing or lending or investing for short or long period from foreign countries, in
all these situations, the firm’s profit will be affected by change in foreign exchange
rates. In all these situations, the firm can take long or short position in futures
currency market as per requirement.
The general rule for determining whether a long or short futures position will hedge
a potential foreign exchange loss is:
Loss from appreciating in Indian rupee= Short hedge
Loss form depreciating in Indian rupee= Long hedge
53
The choice of underlying currency
The first important decision in this respect is deciding the currency in which futures
contracts are to be initiated. For example, an Indian manufacturer wants to
purchase some raw materials from Germany then he would like future in German
mark since his exposure in straight forward in mark against home currency (Indian
rupee). Assume that there is no such future (between rupee and mark) available in
the market then the trader would choose among other currencies for the hedging in
futures. Which contract should he choose? Probably he has only one option rupee
with dollar. This is called cross hedge.
Choice of the maturity of the contract
The second important decision in hedging through currency futures is selecting the
currency which matures nearest to the need of that currency. For example, suppose
Indian importer import raw material of 100000 USD on 1st November 2008. And he
will have to pay 100000 USD on 1st February 2009. And he predicts that the value of
USD will increase against Indian rupees nearest to due date of that payment.
Importer predicts that the value of USD will increase more than 51.0000.
So what he will do to protect against depreciating in Indian rupee? Suppose spots value of 1
USD is 49.8500. Future Value of the 1USD on NSE as below:
Another important decision in this respect is to decide hedging ratio HR. The value
of the futures position should be taken to match as closely as possible the value of
the cash market position. As we know that in the futures markets due to their
standardization, exact match will generally not be possible but hedge ratio should
be as close to unity as possible. We may define the hedge ratio HR as follows:
HR= VF / Vc
Where, VF is the value of the futures position and Vc is the value of the cash
position.
Suppose value of contract dated 28th January 2009 is 49.8850.
And spot value is 49.8500.
HR=49.8850/49.8500=1.001.
FINDINGS
56
Cost of carry model and Interest rate parity model are useful tools to find out
standard future price and also useful for comparing standard with actual
future price. And it’s also a very help full in Arbitraging.
New concept of Exchange traded currency future trading is regulated by
higher authority and regulatory. The whole function of Exchange traded
currency future is regulated by SEBI/RBI, and they established rules and
regulation so there is very safe trading is emerged and counter party risk is
minimized in currency Future trading. And also time reduced in Clearing and
Settlement process up to T+1 day’s basis.
Larger exporter and importer has continued to deal in the OTC counter even
exchange traded currency future is available in markets because,
There is a limit of USD 100 million on open interest applicable to trading
member who are banks. And the USD 25 million limit for other trading
members so larger exporter and importer might continue to deal in the OTC
market where there is no limit on hedges.
In India RBI and SEBI has restricted other currency derivatives except
Currency future, at this time if any person wants to use other instrument of
currency derivatives in this case he has to use OTC.
57
SUGGESTIONS
Currency Future need to change some restriction it imposed such as cut
off limit of 5 million USD, Ban on NRI’s and FII’s and Mutual Funds from
Participating.
Now in exchange traded currency future segment only one pair USD-INR
is available to trade so there is also one more demand by the exporters
and importers to introduce another pair in currency trading. Like POUND-
INR, CAD-INR etc.
In OTC there is no limit for trader to buy or short Currency futures so
there demand arises that in Exchange traded currency future should have
increase limit for Trading Members and also at client level, in result OTC
users will divert to Exchange traded currency Futures.
In India the regulatory of Financial and Securities market (SEBI) has Ban
on other Currency Derivatives except Currency Futures, so this restriction
seem unreasonable to exporters and importers. And according to Indian
financial growth now it’s become necessary to introducing other currency
derivatives in Exchange traded currency derivative segment.
58
CONCLUSIONS
By far the most significant event in finance during the past decade has been the
extraordinary development and expansion of financial derivatives…These
instruments enhances the ability to differentiate risk and allocate it to those
investors most able and willing to take it- a process that has undoubtedly improved
national productivity growth and standards of livings.
The currency future gives the safe and standardized contract to its investors and
individuals who are aware about the forex market or predict the movement of
exchange rate so they will get the right platform for the trading in currency future.
Because of exchange traded future contract and its standardized nature gives
counter party risk minimized.
Initially only NSE had the permission but now BSE and MCX has also started
currency future. It is shows that how currency future covers ground in the compare
of other available derivatives instruments. Not only big businessmen and exporter
and importers use this but individual who are interested and having knowledge
about forex market they can also invest in currency future.
Exchange between USD-INR markets in India is very big and these exchange
traded contract will give more awareness in market and attract the investors.
59
LIMITATION OF THE STUDY
The limitations of the study were
The analysis was purely based on the secondary data. So, any error in the
secondary data might also affect the study undertaken.
The currency future is new concept and topic related book was not available
in library and market.
The study is based only on secondary & primary data so lack of keen
observations and interactions were also the limiting factors in the proper
conclusion of the study
60
ANNEXURE
QUESTIONNAIRE
1) What do you understand by training?a) Learningb) Enhancement of knowledge, skill and aptitudec) Sharing informationd) All of above
2) Training is must for enhancing productivity and performance.a) Completely agreeb) Partially agreec) Disagreed) Unsure
3) (i) Have you attended any training programme in the last 01 year?a) Yesb) No
(ii) If yes ,which module of soft skill development training?a) Personality and positive attitudeb) Business communicationc) Team building and leadershipd) Stress management and work-life balancee) Business etiquettes and corporate groomingf) All of aboveg) If any other please specify ___________________________
4) (i) After the training ,have you given feedback of it?
61
a) Yesb) No
(ii) If yes, through which method?(can select more than one)a) Questionnaireb) Interviewc) Supplement testd) If any other please specify _______________
5) Which method of post training feedback according to you is more appropriate?a) Observationb) Questionnairec) Interviewsd) Self diariese) Supplement test
6) (i) Do you think that the feedback can evaluate the training effectiveness?a) Yesb) No
(ii) If yes, how can the post training feedbacks can help the participants?(can select more than one)a) Improve job performanceb) An aid to future planningc) Motivate to do betterd) All of the abovee) None
7) Post training evaluation focus on result rather than on the effort expended in conducting training.a) Completely agreeb) Partially agree
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c) Disagreed) Unsure
8) What should be the ideal time to evaluate the training?a) Immediate after trainingb) After 15 daysc) After 1 monthd) Cant say
9) Should the post training evaluation procedure reviewed and revised periodically?a) Yesb) Noc) Cant say10) Is the whole feedback exercise after the training worth the time, money and effort?a) Yesb) Noc) Cant say
11) The post training feedbacks can be used :a) To identify the effectiveness and valuation of the training programmeb) To identify the ROI( return on investment)c) To identify the need of retrainingd) To provide the points to improve the traininge) All of above
12) Any suggestion for improving the post training feedback procedure exists in Sahara India Pariwar?
BIBLIOGRAPHY
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Financial Derivatives (theory, concepts and problems) By: S.L. Gupta.
NCFM: Currency future Module.
BCFM: Currency Future Module.
Center for social and economic research) Poland
Recent Development in International Currency Derivative Market by: Lucjan T.
Orlowski)
Report of the RBI-SEBI standing technical committee on exchange traded currency
futures) 2008
Report of the Internal Working Group on Currency Futures (Reserve Bank of India,