Which of the following types of currencies are particularly traded in Non Deliverable Forward market.
A) Restricted and Non-convertible
B) Restricted only
C) Convertible
D) Passive
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ans is A
Explanation:
Two parties agree to take opposite sides of a transaction for a set amount of money—at a contracted rate, in the case of a currency NDF. This means that counterparties settle the difference between contracted NDF price and the prevailing spot price. The profit or loss is calculated on the notional amount of the agreement by taking the difference between the agreed-upon rate and the spot rate at the time of settlement
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