7
Currency Futures
LEARNING OBJECTIVES
After completing this chapter, you will be able to answer the following questions:
- What are currency futures?
- How are currency futures priced?
- How are currency futures used for hedging?
- How are currency futures used for speculation?
- How are currency futures used for arbitrage?
BOX 7.1 India Increases the position limit for Investors in Currency Futures
Reserve Bank of India raised the limit for a trader in currency futures from USD 60 million across all currency pairs against Indian rupee and across the three exchanges, NSE, BSE, and MCX. The rationale for raining the limit is that it would increase the daily trading volume on domestic exchanges. This is also expected to result in arbitrage opportunities ...
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