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Management · Q874

International Finance and Treasury

Graduate and Post Graduate · Management · question 874

Q874

The given statements are related to financial derivatives. Choose the correct answer for the statements being correct or incorrect. Statement I A speculator will gain, if he sells foreign currency under a forward contract, when the spot price is higher than the forward price. Statement II In currency futures, intra currency spread exists when a speculator buys/sells the same currency for two delivery dates.

A.
Statement I is correct, but Statement II is incorrect
B.
Statement II is correct, but Statement I is incorrect
Answer
C.
Both statement are correct
D.
Both statements are incorrect

Answer: Option B

Solution

Answer: Option B
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