When the two countries are having the gold standard, their currency units are either made of gold specified purity and weight or freely convertible into gold of given purity at fixed rate, this theory known as
Which of the following statement is true? Statement I Cross rate represents when one unit of foreign currency is represented in the terms of another foreign currency. Statement II Cross rates are determined only with the help of domestic currency and the foreign currency.
The following two statements relate to financial derivatives. Choose the correct answer for statements being correct or incorrect. Statement I When an option is allowed to be exercised only on the maturity date, it is called an American option. Statement II If the option holder does not lose or gain whether he exercise his option or buys or sells the asset form the market, the option is said to be at-the-money.
When a direct quote of the home currency or any other currency is not available in the forex market, it is computed with the help of exchange quotes of others pairs of currencies, is referred to by which one of the following?
Which of the following statements are correct?
1. A put option is said to bein the money or favourable for the option holder when the strike price is higher than the spot price.
2. A put option is said to be out of money when the strike price is lower than the market price.
3. Fir an option writer the maximum gain is the amount of premium received by the put option holder.
The activity of making profit through buying a currency cheap in one market and selling it dear in the other market at a particular point of time is known as