1. Explain the rationale for introducing currency futures.
2. How does a currency futures contract di er from a currency
forward contract?
3. Why are currency forward contracts more popular than cur-
rency futures contracts?
4. Explain the application of the principle of covered interest rate
arbitrage in pricing currency futures.
5. Explain why speculation using futures is preferable to specu-
lating using currencies directly.
6. Under what conditions would you make arbitrage pro ts?
1. e current spot exchange rate between the Indian ...
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