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NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: International Banking and Foreign Exchange Management
Internal Assignment Applicable for December 2019 Examination
Assignment Marks: 30
1. A dealer has the following position in GBP against INR:
Spot – GBP 20 million Long

Three months forward – GBP 20 million short
The spot was executed at an average rate of 100.50 and the forward rate was
100.75.
The dealer now wants to close his position. If the prevailing swap quotes are as
follows, what is the profit/loss in squaring off his position?
GBP/INR Spot: 100.6510/100.6530
3-month Swap: 9135/9170 (10 Marks)
2. Mr. Mehta was a businessman and was planning to expand his operations to other
countries as well but he was not very sure about the forex market and also how his
business would get affected by various factors. He decided to meet a bank manager
who can help him understand these factors. If you are the manager help him
understand the various factors that would cause the fluctuation in the exchange rate
which may affect his business as well. (10 Marks)
3. Neha has completed her MBA and has joined the Treasury department of a bank.
During training her manager explained her that any open currency position may
give rise to exchange rate risks. If the dealer leaves this position unhedged, he
carries the risk that the exchange rate might turn adverse the next day. He wanted
her to prepare report on:
a) Position limits on a currency that a dealer can carry during regular trading hours.
(5 Marks)
b) Position limits on a currency that a dealer can carry over to the next day up to this
limit. (5 Marks)