International Finance And Treasury - Study Mode

[#516] The marking to market in respect of a currency future refers to
Correct Answer

(B) Adjusting the margin money of buyer and seller to reflect the current value of futures

Explanation

Solution: The marking to market in respect of a currency future refers to adjusting the margin money of buyer and seller to reflect the current value of futures. Currency futures are a exchange-traded futures contract that specify the price in one currency at which another currency can be bought or sold at a future date.

[#517] The marking to market of a futures contract is done
Correct Answer

(C) Daily, based on the closing price for the previous day

Explanation

Solution: The marking to market of a futures contract is done daily, based on the closing price for the previous day. In Mark-to-Market accounting the asset values are determined according to market prices at the end of each day in order to arrive at the profit or loss status of the parties in a futures transaction.

[#518] In India currency-notes issue system is based on
Correct Answer

(B) Minimum Reserve System

Explanation

Solution: In India currency-notes issue system is based on Minimum Reserve System. Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion and foreign currencies.

[#519] European Economic Community founded in
Correct Answer

(A) 1957

Explanation

Solution: The European Economic Community (EEC) was a regional organisation that aimed to bring about economic integration among its member states. It was created by the Treaty of Rome of 1957.

[#520] The following statement with respect to currency option is wrong
Correct Answer

(A) Call option will be used by exporters

Explanation

Solution: Call option will be used by exporters with respect to currency option is wrong. Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specific time period.