1. A
SUMMER INTERNSHIP PROJECT PRESENTATION
ON
“A STUDY ON Currency Futures, its features and modus
operandi at Arihant capital market Ltd.
SUBMITTED TO
(Oakbrook Business School)
GUJARAT TECHNOLOGICAL UNIVERSITY
(MBA PROGRAMME)
SUBMITTED BY
Saloni Parghi Bhavin Surani
[ ENROLLMENT NO.: 148320592087] [ENROLLMENT NO.: 148320592052]

2. INTRODUCTION OF THE INDUSTRY
A financial market is a market in which people trade financial
securities, commodities, and other fungible items of value at low
transaction costs and at prices that reflect supply and demand.
Securities include stocks and bonds, and commodities include precious
metals or agricultural goods.
• Capital markets : Commodity, Derivatives, Futures, Insurance, Foreign
exchange markets.
• Money markets

3. INTRODUCTION OF THE COMPANY
• Services
• Online trading
• Depository
• Portfolio management
system
• Advisory Services
• Products
• Equity & Derivatives
• Mutual funds
• IPO
• Currency
• Commodities
ARIHANT capital markets ltd.
• Established in 1994

4. INTRODUCTION OF THE TOPIC
01.08.14
4 Currency: USD, GBP, EURO, JPY
• Futures
• Options
Features of currency futures:
• Contract Size
• Quoted and Settle in Indian Rupees
• Maturity
• Settlement price

5. LITERATURE REVIEW
Ref. Objective Findings
Anand and Kaushik
(2008)
what motivates the management to
use foreign currency derivatives in
corporate India
Use of derivatives is hedging the
risk (96.1 percent ranked it as the
number one objective), arbitrage
(55.3 ranked it as number two
objective) and price discovery (36.4
percent assigned it rank two and
33.3 percent assigned it rank three).
Speculative objective is the least
preferred option (62.1 percent
assigned rank four).
Sivakumar and Sarkar
(2008)
to evaluate the various alternatives
available to the Indian corporates
for hedging currency exposure
that most Indian firms use forwards
and options to hedge their foreign
currency exposure.
Nair (2004) observed that in most of the
countries, where currency futures have
really flourished, the trading takes
place on multiple commodity
exchanges, rather than stock
exchanges. Besides, since foreign
operators – NRIs, FIIs etc. – are
barred from participating, the new
exchange means the contract can be
traded only within India and that too,
without involving any outflow of
funds.

6. OBJECTIVES
• To know about the currency market in India.
• To assess the customer’s perception
• To motivate currency trading among the masses.
• Attributes that drives the retail investors for each asset market.
• Reasons for non-inclination of investors towards.
01.08.14

7. Research methodology
Descriptive Research:
Data Collection:
data collected by questionnaire which is included
demographic information and related currency
market data
Sources of data: Primary data
Sampling size: 200 Questionnaire

8. Research methodology
Hypothesis:
• Ho : There is a significant relation between asset market
and driving attributes of each asset market
• H1 : There is no significant relation between asset market
and driving attributes of each asset market
Statistical tool :
• Mean S.D and chi-square

9. Limitation:
• As only Ahmedabad was dealt in the survey so it does not
represent the view of the total Indian market.
• The sample size was restricted with two hundred respondents.
• There was lack of time on the part of respondents.
• The survey was carried through questionnaire and the questions
were based on perception.
• There may be biasness in information by market participant.
• Complete data was not available due to company privacy and
secrecy.
• Some people were not willing to disclose the investment profile.

10. Data Analysis and Interpretation
Demographic information
Age :
Below 25 58
25-30 41
30-35 69
35 Above 32
Total 200
Age

11. Gender
Gender
Female 61
Male 139
Total 200

12. Profession
Profession
Govt. Employee 32
Grad/Post graduate student 26
Others 13
Self employed 63
Service 66
Total 200

13. Income
Income
No Income 25
Rs. 11 lac & above 4
Rs. 2.5 lac-Rs. 5 lac 60
Rs. 5 lac-Rs. 8 lac 79
Rs. 8 lac-Rs. 11 lac 32
Total 200

14. Q-1 did you ever think of currency derivatives
trading as an investment option or profession?
No , but planning
to invest after
performing
research 113
Never, What's
Currency
Derivatives 23
Yes 64
Total 200

15. Q-2 In which asset markets do you trade?
Commodity 52
Mix 15
Currency 42
Equity 63
No Trade 28
Total 200

16. Q-3 Rate you expertise in the asset markets:
Beginner Expert
Inter
medi
ate Zero
Commodity 40 38 93 29
Currency
Derivatives 40 24 102 34
Equity 26 63 96 15

17. Q-4 For which purpose you invest?
Hedging 56
import export 32
No Trade 5
Speculation 107
Total 200

18. Q-5 what kind of trader best describes you?
Arbitra
ger Hedger
no
trade
Speculat
or
Commodity 18 63 34 85
Currency
Derivatives 13 89 43 55
Equity 19 37 28 116

19. Q-6 choose the following driving attributes for
each asset markets
Arbitrage Hedging Market volatility no trade Portfolio diversification Returns
Commodity 15 37 29 28 24 67
Currency Derivatives 5 85 13 42 23 32
Equity 39 42 13 39 12 55

20. Q-7 why do think Indian retail investors are
less inclined towards currency derivatives
trading?
Insignificant Neutral Significant Very Insignificant very significant
Not enough self-knowledge 49 58 47 40 6
Less popular among peers 23 88 35 25 9
Lack of govt. Initiatives 26 84 61 9 20

21. Q-8 how effective would be the following factors to
boost currency derivatives trading in India?
1 2 3 4 5
Through media broadcast 10 13 53 80 44
Opportunity to trade in
non US currency futures 38 43 63 46 10
Relaxation of regulatory
framework by SEBI 11 18 61 52 58
Through
media
broadcast
Opportunit
y to trade
Relaxati
on in
regulatio
n
Mean 3.675 2.735 3.64
S.D 1.04635 1.158224 1.15197
Rank 1 3 2

22. Testing of hypothesis
Hypothesis:
• Ho : There is a significant relation between asset market and
driving attributes of each asset market
• H1 : There is no significant relation between asset market and
driving attributes of each asset market
Cross Tabulation : Driving attributes and asset market
Driving Attributes : Portfolio diversification, returns, arbitrage,
market volatility, hedging.

23. Cross Tabulation : Driving attributes and Equity
Crosstab Equity
Driving attributes / equity
Total
Portfolio
diversification Hedging Returns Arbitrage Market Volatility
No
Trade
Asset market Equity Count 2 17 27 14 4 11 75
Expected Count 4.5 15.8 20.6 14.6 4.9 14.6 75.0
% within Asset
market
2.7% 22.7% 36.0% 18.7% 5.3% 14.7% 100.0%
Commodity Count 5 12 11 14 6 4 52
Expected Count 3.1 10.9 14.3 10.1 3.4 10.1 52.0
% within Asset
market
9.6% 23.1% 21.2% 26.9% 11.5% 7.7% 100.0%
Currency Count 5 13 13 11 3 0 45
Expected Count 2.7 9.4 12.4 8.8 2.9 8.8 45.0
% within Asset
market
11.1% 28.9% 28.9% 24.4% 6.7% .0% 100.0%
No Trade Count 0 0 4 0 0 24 28
Expected Count 1.7 5.9 7.7 5.5 1.8 5.5 28.0
% within Asset
market
.0% .0% 14.3% .0% .0% 85.7% 100.0%
Total Count 12 42 55 39 13 39 200
Expected Count 12.0 42.0 55.0 39.0 13.0 39.0 200.0
% within Asset
market
6.0% 21.0% 27.5% 19.5% 6.5% 19.5% 100.0%

24. Chi square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.0602 15 .000
Likelihood Ratio 101.198 15 .000
Linear-by-Linear Association 14.810 1 .000
N of Valid Cases 200
Driving attributes * Equity
• Chi square Tab(30.578) > Chi square Cal(1.0602)
• So null hypothesis(Hnot) is Accepted so we can say that there
is a significance relation between Equity and driving attributes

25. Cross Tabulation : Driving attributes and Currency
Crosstab
Driving attributes / Currency
Total
Portfolio
diversification Hedging Returns Arbitrage
Market
Volatility
No
Trade
Asset
market
Equity Count 12 30 8 4 6 15 75
Expected Count 8.6 31.9 12.0 1.9 4.9 15.8 75.0
% within Asset
market
16.0% 40.0% 10.7% 5.3% 8.0% 20.0% 100.0%
Commodity Count 7 25 12 1 5 2 52
Expected Count 6.0 22.1 8.3 1.3 3.4 10.9 52.0
% within Asset
market
13.5% 48.1% 23.1% 1.9% 9.6% 3.8% 100.0%
Currency Count 3 29 12 0 1 0 45
Expected Count 5.2 19.1 7.2 1.1 2.9 9.4 45.0
% within Asset
market
6.7% 64.4% 26.7% .0% 2.2% .0% 100.0%
No Trade Count 1 1 0 0 1 25 28
Expected Count 3.2 11.9 4.5 .7 1.8 5.9 28.0
% within Asset
market
3.6% 3.6% .0% .0% 3.6% 89.3% 100.0%
Total Count 23 85 32 5 13 42 200
Expected Count 23.0 85.0 32.0 5.0 13.0 42.0 200.0
% within Asset
market
11.5% 42.5% 16.0% 2.5% 6.5% 21.0% 100.0%

26. Chi square Tests
Driving attributes * Currency
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.1612 15 .000
Likelihood Ratio 113.515 15 .000
Linear-by-Linear Association 15.654 1 .000
N of Valid Cases
200
• Chi square Tab(30.578) > Chi square Cal(1.1612)
• So null hypothesis(Hnot) is accepted so we can say that there is a
significance relation between currency and driving attributes

27. Cross Tabulation : Driving attributes and Commodity
Crosstab
Driving attributes / Commodity
Total
Portfolio
diversification Hedging Returns Arbitrage
Market
Volatility
No
Trade
Asset market Equity Count 13 16 25 8 11 2 75
Expected Count 9.0 13.9 25.1 5.6 10.9 10.5 75.0
% within Asset market
17.3% 21.3% 33.3% 10.7% 14.7% 2.7% 100.0%
Commodity Count 2 11 24 3 10 2 52
Expected Count 6.2 9.6 17.4 3.9 7.5 7.3 52.0
% within Asset market
3.8% 21.2% 46.2% 5.8% 19.2% 3.8% 100.0%
Currency Count 7 10 17 4 7 0 45
Expected Count 5.4 8.3 15.1 3.4 6.5 6.3 45.0
% within Asset market
15.6% 22.2% 37.8% 8.9% 15.6% .0% 100.0%
No Trade Count 2 0 1 0 1 24 28
Expected Count 3.4 5.2 9.4 2.1 4.1 3.9 28.0
% within Asset market
7.1% .0% 3.6% .0% 3.6%85.7% 100.0%
Total Count 24 37 67 15 29 28 200
Expected Count 24.0 37.0 67.0 15.0 29.0 28.0 200.0
% within Asset market
12.0% 18.5% 33.5% 7.5% 14.5%14.0% 100.0%

28. Chi square Tests
• Chi square Tab(30.578) > Chi square Cal(1.4842)
• So null hypothesis(Hnot) is accepted so we can say that there is a
significance relation between commodity and driving attributes
01.08.14
Value df Asymp. Sig. (2-sided)
Pearson Chi-
Square 1.4842 15 .000
Likelihood Ratio 117.157 15 .000
Linear-by-Linear
Association 30.313 1 .000
N of Valid Cases 200
Driving attributes * Commodity

29. FINDINGS
• The major responders find are male and there are major no.
Of age group between 30 to 35 years.
• There is a majority of service class and self-employed class in
this research.
• The major no. Of responders are having income of Rs. 5 to
8 lacs.
• From the data we found that major no. Of people are
planning to invest in currency futures after performing
research.

30. FINDINGS
• We have observed from collected data that the major no.
Of expertise are intermediate in all asset markets.
• Customers are having negative perception about currency
futures.
• The higher no of purposes are speculations in equity
market as per collected data.

31. Suggestions
• Give more reasons of less inclination of investors
• Boost currency trading by media broadcast
• Remove negative perception about currency

32. CONCLUSION
As per our Research and Findings we would like to conclude
that There is negative perception about currency in the mind
of investors and if we want to boost the currency trading in
India we should take a help of media broadcasts but we can’t
conclude the reason of the less inclination towards currency
trading because people have neutral responses of said
reasons. It seems that they are not clear about the reasons or
might be they have other reasons of less inclination. We also
put hypothesis on the research in which we had proved that
there is a significance relation between all asset market and
the driving attributes of asset. We are also concluding on the
basis of our research that most people prefer equity first.

33. BIBLIOGRAPHY
Book referred: - Research Methodology by C R Kothari
Reference:
• Nair, C.K.G. (2004) ‘Commodity Futures Markets in India: Ready for Take-off’
Nsenews letter, July 2004.
• Kaushik (2008), Use of foreign currency derivates in India IIMB Management Review,
20(3), July - September, 2008, pp. 324-339
• Sivakumar and Sarkar (2008), Corporate Hedging for Foreign Exchange Risk in India
• Dash and Madhava (2008), A study on the impact of currency fluctuation on the
Indian IT Sector(April 15, 2008) Available at
SSRN: http://ssrn.com/abstract=1326506
• Jesswein, Kwok and Floks (1995), Jesswein, Kurt, Chuck C. Y. Kwok, and William
Folks, Jr. “Corporate Use of Innovative Foreign Exchange Risk Management
Products.” Columbia Journal of World Business (Fall 1995), pp. 70–82.
Websites:-
• www.arihantcapital.com, www.sebi.gov.in, www.nseindia.com, www.bse.com

34. Thank you