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WorksheetsDerivative Quiz Batch 2021-23
Total questions: 53
Worksheet time: 1hrs 20mins
On which of the following can you have a futures contract
Share Index
Commodities
Currency
all of the above.
none of the above
The greater the numer of perticipants in any market, generally lower the liquidity
TRUE
FALSE
True only for the year 2012
True only for the year 2011
none of the above
The area within the exchange where trading was conducted through open outcry, is known as the Pit
True
FALSE
Sometimes called
all of the above.
none of the above
An Investor has a buy position in ascrip. He can m ake his position nil in the settlement by selling:
Any security of equal quanitity
The same crip and same quantity
Any index scrip of equal quantity
Any A- scrip for equal quantitygroup
none of the above
Hedging risk is the process by which a financial manager tries to fix a price for a future purchase or sale of a given asset. This can be accomplished by any of the four following instruments:
forward contracts
futures contracts
options contracts
swap contracts
All of the above
The unpredictability of the creditworthiness of customers causes
Credit risk
Changes in currency exchange rates
Changes in interest rates.
Changes in prices of financial instruments.
none of the above
The members of any exchange can be classified as:
Clearing members (CM)
Trading members (TM)
Both A and B
Clearance
none of the above
Primarily, a CM performs the following functions:
Clearance
Settlement
Risk management
All of the above.
none of the above
Types of Orders
Market orders
Limit orders
Stop-loss orders
All of the above.
none of the above
On the basis of price, orders may be classified as under:
Limit price/orders:
Market price/orders:
Sell orders
Stop-loss price/orders
All of the above.
A forward contract
is an agreement to buy or sell a specified asset
at a certain time in the future
for a specified price agreed upon at the time of entering into the contract.
All of the above.
none of the above
A forward contract requires that the needs of the two parties entering into the contract match. It is often difficult to find a party with matching needs. Matching needs can be explained as follows
The quantity of goods being bought and sold must be the same.
The quality of goods being bought and sold must be the same.
The time of delivery by the seller must match the time at which the buyer needs the goods.
All of the above.
none of the above
The cost of carry includes
The actual cost of storage in the warehouse, including warehouse rent
The expenses in connection with storage, such as freight and insurance
The opportunity cost of funds invested in buying the goods
All of the above.
none of the above
Currency forward contracts are preferred for hedging currency risk, because
the hedger can customize the forward contracts on the basis of their needs.
Currency forwards can be negotiated between the customer and the bank for any currency, any amount, and any maturity.
Currency forward contracts are used extensively by Indian companies for hedging currency risk.
A and B
none of the above
Currency forward contracts are used by parties that develop exposure to a foreign currency at a future time. The exposure can result from the following reasons:
Export of goods and services with the invoice denominated in a foreign currency
Import of goods and services from a foreign country with the invoice denominated in the foreign currency
Investments in foreign securities, which pay interest or dividends in foreign currency at known future time periods
Borrowing from a foreign entity, which requires payment of interest in foreign currency at known future intervals
All of the above.
Which of the following is the closest to the forward price of the share, if cash price is Rs. 750, the forward contract maturity is 6 months from the date, and market interest rate is 12%?
940.8
840
772.5
795
none of the above
Mark-to-market margins are collected
Every 3 days
On a daily bases
On a weekly bases
Every 2 days
none of the above
You sold one XYZ stock futures contract at 278 and the lot size is 1200. what is your profit or loss if you purchase contract back at Rs.265.
-16600
-15600
15600
16600
none of the above
A member has two clients C1 and C2. C1 has purchased 800 contracts and C2 has sold 900 contracts in August XYZ future series. What is the outstanding liability (open position) of the members toward clearing corporation in number of contracts
1700
100
900
800
none of the above
Insvestors A wants to sell 20 contracts of August series at Rs.4500 and Investors B wants to sell 17 contracts of Spetember series st Rs.4550. Lot size is 50 for both these contracts. The initial margin is fixed at 6%. How much initial margin is requierd to collect from both these investors (Sum of initial margins of A and B) by the broker?
270000
502050
410000
232050
none of the above
A trader has brought 100 shares of XYZ at Rs.780 per share.He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs.1000 on this long position in XYZ. What should the trader do?
Place a limit buy order for 100 shares of XYZ at Rs.790 per share.
Place a limit sell order for 100 shares of XYZ at RS.770 per share.
Place a stop loss sell order for 100 shares of XYZ at Rs.770 per share.
Place a limit buy order for 100 shares of XYZ at RS.770 per share.
none of the above
You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at price of Rs.3,400. When you closed this position after a few days, you realized that you made a profit of RS.10,000. Which of the following
Selling futures contract at Rs.3600.
Buying futures contract at Rs.3200.
Selling futures contract at Rs.3200.
Buying futures contract at RS.3600.
none of the above
What role do speculators play in the future market?
They transfer their risk to the hedgers.
They take delevery of the commodities at expiration.
They produce the commodities traded at future exchanges.
They add to the liquidity in the future markets.
Cost of carry models state that ____________.
Price of futures = Spot price
price of futures = Spot-Cost of carry
Price of futures = Cost of carry
Price of futures = Spot+Cost of carry
none of the above
Margins in 'futures' trading are to be paid by _________.
only the buyer.
Only the seller.
The clearing corporation.
Both the buyer and the seller.
none of the above
value-at-risk measures __________.
Risk level of financial portfolio.
Networth of an investor.
Credit rating of an investor.
Value of proprietory portfolio.
none of the above
Client A has purchased 10 contracts of december series and sold 7 contracts of january series of the NSE Nifty futures. How many lots will get categorised as regular (non-spread) open positions?
17
10
7
3
none of the above
Financial derivatives provides the facillity for for _________.
Hedging
Speculation
Arbitraging
all of the above
none of the above
Selling short a stock means _____________.
seller has to deliver the stock within a short time.
Seller owns the stock he is supposed to deliver.
Seller has more than a year's time to deliver the stock which is sold.
Seller does not own the stock he is supposed to deliver.
none of the above
The purchase of a share in one market and the simultaneous sale in a different market to benefit from price differentials is known as ________.
Arbitrage
Mortgage
Hedging
Speculation
none of the above
Exchange traded options are _________.
Standardised options.
Always in-the-money options.
Always out-of-the money options.
Customised options
none of the above
If you have sold a XYZ futures contract(contract multiplier 50) at 3100 and brought it back at 3300, what is your gain or loss?
A gain of Rs.10000
A loss of Rs.10000
A loss of Rs.5000
A gain of Rs.5000
none of the above
Financial derivative contract include.
Stocks
Bonds
Futures
Debenture
none of the above
Which of the following is not a financial derivative.
Stock
Futures
Options
Forward contracts
none of the above
A contract that requires the investor to buy securities on a future date is called a.
Short contract
Long contract
Hedge
Non Hedge
none of the above
A contract that requires the investor to sell securities on a future date is called a.
Short contract
Long contract
Hedge
Micro hedge
none of the above
Forward contracts do not suffer from the problem of.
A lack of liquidity
A lack of flexibility
The difficulty of finding a counterparty
Default risk
none of the above
The elimination of riskless profit opportunities in the futures market is referred to as.
Speculation
Hedging
Arbitrage
Mark to market
none of the above
An Investor takes a short position in a stock at the price of Rs.200 in future market and Square-off his position at the price of Rs. 210. The lot size of stock is 1000 shares. His net profit or loss is.
Profit 10000
loss 10000
Profit 1000
loss 1000
none of the above
Which of the following is false.
Futures contracts trade on a stock exchange.
Futures contracts are more liquid than forward contracts.
Futures contracts are marked to market.
Futures contracts are not allowed in commodities.
none of the above
Which one of the following actions will offset a long position in a futures contract that expires in June.
Sell a futures contract that expires in June.
Sell any futures contract, regardless of its expiration date.
Hold the futures contract until it expires.
Buy a futures contract that expires in June.
none of the above
Which of the following does the most to reduce default risk for futures contracts.
Flexible delivery arrangements.
High liquidity.
Credit checks for both buyers and sellers.
Marking to market.
none of the above
Using futures contracts to transfer price risk is called.
Speculating.
Diversifying.
Arbitrage.
Hedging.
none of the above
Which of the following causes the futures price of an asset to increase, everything else held constant.
Higher costs of carrying the underlying asset.
Lower risk-free rate of interest.
Lower expected spot price for the underlying asset.
Higher expected spot price for the underlying asset.
none of the above
If a trader take short position in a stock at the price of 35 and and square-off his postion at 38. Lot size is 3000 shares. His total profit or loss is.
9000
-3000
3000
-9000
none of the above
The advantage of forward contracts over future contracts is that they.
are standardized.
have lower default risk.
are more liquid.
none of the above.
All of the above
On the expiration date of a futures contract, the price of the contract
Always equals the purchase price of the contract.
Always equals the average price over the life of the contract.
Always equals the price of the underlying asset.
Cannot be determined.
none of the above
An investor enters into a short forward contract to sell 1,00,000 British Pounds for US dollars at an exchange rate of 1.9000 US dollars per pound. How much does the investor gain or loss if the exchange rate at the end of the contract is 1.8700
USD 3000
BP 3000
USD -3000
BP -3000
none of the above
An option that can be exercised at any time up to maturity is called a.
Swap
Stock option
European option
American option
none of the above
Which of the following is potentially obligated to sell an asset at a predetermined price.
A call buyer.
A put buyer.
A put writer.
A call writer.
none of the above
Your Name
Your Roll No (Like PF2123-0001)
Your Division (Fin Group 1 / Fin group 2 / Fin group 3)
