Questions..

Derivatives can be used for which of the following? (a) Hedging (b) Arbitrage (c) Speculating (d) All of the above

Daily Mark to Market settlement of futures takes place on ________ basis . (a) T+0 (b) T+3 (c) T+5 (d) T+1

A market index is very important for its use ___________. (a) as a barometer for market behavior (b) as a benchmark of portfolio performance (c) in portfolio management (d) All of the above

Which of the following are derivatives? (a) Options (b) Futures (c) Forward Rate Agreements (d) All of the above

Initial margin is collected to __________. (a) make good daily losses (b) square-off a position on the expiry of the contract (c) safeguard against potential losses on out-standing positions (d) provide for losses that have already occurred

The beta of Nifty is _______. (a) 1.7 (b) 1 (c) 0 (d) (-)1

Futures differs from forwards in the sense that ________. (a) settlement of contract takes place in the future (b) both parties are bound to give/take delivery (c) positions are marked-to-market everyday (d) contracts are custom designed

You have bought a portfolio of securities on the exchange. To eliminate the risk arising out of market, you should _____. (a) buy index futures (b) buy stock futures (c) sell stock futures (d) sell index futures

The spot price of TISCO is Rs. 2050 and the cost of financing is 10%. What is the fair price of a one month futures contract on TISCO? (a) 2,082.80 (b) 2,066.30 (c) 2,085.15 (d) 2,099.40 Hedging with index futures means ___________. (a) long security, short security (b) long index futures, short index futures (c) long security, short index futures (d) long security, long index futures

Derivatives can be used for which of the following? (a) Hedging (b) Arbitrage (c) Speculating (d) All of the above

Daily Mark to Market settlement of futures takes place on ________ basis . (a) T+0 (b) T+3 (c) T+5 (d) T+1