FRM阅读理解.doc

第一部分 阅读理解 （每题2分，共40分） Passage 1 Non-Deliverable Forward (NDF) has become a popular instrument available to corporate treasurers who wish to hedge their exposure to foreign currencies which are not internationally traded and which do not possess a forward market for non-domestic players like Philippine Peso (PHP), Indian Rupee (INR) Korean Won (KRW) and Chinese Renminbi (CNY) . An NDF is a short-term committed forward cash settlement currency derivative instrument. It is essentially an outright (forward) FX contract whereby on the contracted settlement date, profit or loss is adjusted between the two counterparties basing on the difference between the contracted NDF rate and the prevailing spot FX rates on an agreed notional amount. The NDF rate is the rate agreed between the two counterparties on the transaction date. This is essentially the forward rate of the currencies deal. The notional amount is the face value of the NDF which is agreed between the two counterparties, It should again be noted that there is never any intention to exchange the two currencies principal sums; the only movement is the difference between the NDF rate and the prevailing spot market rate and this amount is settled on the settlement date. Every NDF has a fixing date and a settlement (delivery) date. The fixing date is the day and time whereby the comparison between the NDF rate and the prevailing spot rate is made settlement date is the day whereby the difference is paid or received. Depending on the currencies dealt, there are variations whereby for some currencies, the fixing date is one good business day before the settlement date and for other currencies, the fixing date is two good business days before the settlement date. Generally, the fixing of spot rate is based on a reference page on Reuters or Telerate with a fallback of calling four leading dealers in the relevant market for a quote. As it is a cash-settlement instrument, there is no movement of the principal amoun