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Management Programme
ASSIGNMENT
SECOND
SEMESTER
201
6
MFP
-
4
:
CURRENCY AND DEBT MARKETS
School of Management Studies
INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI
–
110 068
MFP
-
4
MFP
-
4
:
CURRENCY AND DEBT MARKETS
ASSIG
N
MENT
Course Code
:       
MFP
–
4
Course Title
:       
Currency and Debt Markets
Assignment Code
:        MFP
-
4
/
TMA/
SEM
-
II/201
6
Assignment Coverage
:       
All Blocks
Not
e
: Attempt all the questions and submit this assignment on or before 31
st
October, 2016
to
the
coor
dinator of your study centre.
1.
Briefly  explain  the  structure  of  the  currency  markets  in  India.  Explain  the  difference
between   exchange   traded   and   OTC   deriva
tives   market.   Explain   the   meaning   of
derivatives and discuss the major currency derivative products that are traded.
2.
(a) What are currency swaps? Explain how is it used to reduce cost of borrowings?
(b) What are Forward Rate Agreements (FRAs
)? Explain
ho
w
FRAs can
be used to  
hedge currency risk
3.
Explain the following
(a)
Put Call Parity
(b) Delta Hedging
4.
Explain  the  structure  of  the  Indian  Debt  Market  and  briefly  discuss  the  various
instruments that are traded in the debt market in India.
5.
(a) Wh
at is meant by 'Duration' of a bond? How is the duration and modified  
Duration of a bond calculated
(b)
What are 'Interest Rate Futures’? Explain the process of pricing of interest rate
futures.