A Project Report

On

FOREIGN EXCHANGE MARKET

Submitted in partial fulfillment of the requirement

For the award of degree of
Bachelor of Management Studies (B.M.S.)
Of
University of Mumbai.

SUBMITTED BY
ROSHAN SACHIDANAND RAI
Under The Guidance Of:
PROF. MANISHA MOTWANI
SOUTH INDIAN CHILDREN EDUCATION SOCIETYS
DEGREE COLLEGE OF ARTS, COMMERCE AND
SCIENCE
Ambarnath
Affiliated to University of mumbai
Academic Year 2015-2016.

DECLARATION

I, ROSHAN SACHIDANAND RAI, Roll No:-TMS-15015 OF SICES

DEGREE COLLEGE,AMB(W), in The Third Year BACHELOR IN
MANAGEMANT STUDIES Semester V hereby declare that I have
completed the Project entitled FOREIGN EXCHANGE MARKET
for the academic year 2015-2016. The information submitted herein is true
and original to the best of my knowledge

Stamp of college

(SICES degree college,

Signature of student

(ROSHAN RAI)

Arts,Science & Commerce)

Signature of co-coordinator

Signature of external examiner

CERTIFICATE

This is to certify that Mr.Roshan Sachidanand Rai has successfully

completed project titled FOREIGN ECCHANGE MARKETunder the
our guidance of Prof Manisha Motwani towards partial fulfillment of
Semester of Bachelor Of Managemant Studies as prescribed by the
University of Mumbai under our supervision during the academic year
2015-2016.Information submitted is true and original to the best of our
knowledge.

Signature of project guide

Signature of External Examinar

Internal Examiner

Signature of co-coordinator

College seal

Signature of principal

ACKNOWLEDGEMENT

It gives me immense pleasure in acknowledging the valuable and cooperative assistance extended to me by the various individuals who have
helped me successfully in completing this project.

First of all I would like to show my gratitude to my guide Professor

MANISHA MOTWANI for her assistance, encouragement and support
on the topic FOREIGN EXCHANGE MARKET.

I would like to thank my parents, friends and colleagues who have

supported me during the making of this research report. The information
provided by them has helped me gain practical understanding of the
subject

I would like to thank the Mumbai University for giving me the

Opportunity to carry out the research.

OBJECTIVE.
The objective behind the preparation of the project on Foreign
Exchange
Be conversant with the functions of the foreign exchange.
Understand What is meant by spot exchange rates.
Appreciate the role of foreign exchange rates plays in ensuring
against foreign exchange risks.
Understand the different theories explaning hoe currency exchange
rates are determined and their relative merits.
Be familiar with the different approaches towards exchange rate
forecasting.
Understand the differences between transaction,translation,and
Economic exposure,and what mangers do to manage each type of
exposure. To study Forex market & Risk management in general as
well as in forex market.
To have a knowledge of different types of forex markets and various
quotations in Forex markets.
To study risk in the Forex market as well as volatility in Forex
market.
To have a knowledge of how people trade in forex market.
To study the factors that force different types of people in different

markets.
To study various strategies of risk management.

RESEARCH METHODOLOGY

To define the research methodology, one has to go step by step. Any

research methodology involves following steps:
I. PROBLEM RECOGNITION
II. DATA COLLECTION
III. ANALYSIS AND INTERPRETATION.

RESEARCH PROBLEM: A problem properly defined is half solved.

It is very necessary for any research that research problem should
be recognized.
It is critical to any research.
Once problem is identified, it is to be formulated properly.
Initially the plan is stated in a broad and general way and then it is
properly defined in specific terms.
Problem formulation means defining a problem precisely.
In this study our research problem is: THE STUDY OF FOREX
MARKET AND RISK MANAGEMENT.

DATA COLLECTION.
The data is of two types: PRIMARY AND SECONDRY. Data are the facts
presented to the researcher from the study environment. The method of
data collection in my study is SECONDRY only. Because I have collected
all the data from books and from websites.

INDEX
SR.NO.

CHAPTERS.

PAGE NO.

1.

INTRODUCTIION

2.

HISTORY

2-3

3.

INTRODUCTION TO TRADING FOREIGN

4-6

4.

EXCHANGE
WHY TRADE FOREX

7-10

5.

FUNDAMENTAL EVERY TRADER SHOULD

11-12

6.

KNOW
RISK MANAGEMENT

13-22

7.

FOREIGN EXCHANGE RISK MANAGEMENT 23-33

GUIDELINES

8.

34-42
TOOLS FOR MANAGING RISK IN FOREX
MARKET

9.

43-44
CURRENCY FUTURES

10.

OPTIONS ON FUTURE CONTRACTS

45-52

11.

CURRENCY SWAPS

53-57

12.

DERIVATIVES

58-59

13.

ANALYSIS AND INTERPRETATIONS

60-61

14.

FINDINGS

62-63

15.

64-69
HOW TO AVOID TYPICAL PITFALLS AND
START MAKING MORE MONEY IN YOUR

16.

FOREX TRADING
WEBLIOGRAPHY

70