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      Question

      Under the revised framework for hedging foreign exchange

      risk, what condition must be met by users taking positions beyond USD 100 million in contracts involving INR?
      A The user must report the exposure to the RBI directly Correct Answer Incorrect Answer
      B The user must submit quarterly reports to the authorized dealer Correct Answer Incorrect Answer
      C The user must obtain a special license from the RBI Correct Answer Incorrect Answer
      D The user must designate an Authorized Dealer for monitoring transactions Correct Answer Incorrect Answer
      E The user must hedge their entire portfolio Correct Answer Incorrect Answer

      Solution

      As per the circular on "Risk Management and Inter-Bank Dealings," users taking positions beyond USD 100 million must designate an Authorized Dealer to monitor their transactions.

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