n NISM Certifications
NSM General NISM
Medium

GBPINR 3-month future at 70.50, 6-month future at 71.10. After one month, 3-month at 70.30, 6-month at 70.70. What is the profit of the spread trade?

Practice question from NISM Series I - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs 300

  2. B

    Rs 400

  3. C

    Rs 100

  4. Rs 200

    Correct answer

Why this is the answer

First leg: 71.10 – 70.50 = 0.60, Second leg: 70.70 – 70.30 = 0.40, Net profit: 0.60 – 0.40 = 0.20 × 1000 = Rs 200

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