Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword or section
Like this
12Activity

Table Of Contents

0 of .
Results for:
No results containing your search query
P. 1
Questions and Answers

Questions and Answers

Ratings:

4.8

(10)
|Views: 1,165|Likes:
Published by sachin

More info:

Published by: sachin on Dec 02, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less

10/16/2011

 
Contents
1 Basics 9
Q1.1 What is a spottransaction? . . . . . . . . . . . . . . . . . . . 9Q1.2 Thats okay for shirts - but does it ever happen in finance? . . . 9Q1.3 What is a forwardtransaction? . . . . . . . . . . . . . . . . 9Q1.4 What are derivatives? . . . . . . . . . . . . . . . . . . . . . . 10Q1.5 What are “exchange–traded derivatives”? . . . . . . . . . . . . 10Q1.6 What are OTC derivatives? . . . . . . . . . . . . . . . . . . . 10Q1.7 Is “badlatrading like derivatives trading? . . . . . . . . . . . . 10Q1.8 What are the instruments traded in the derivatives industry, andwhat are their relative sizes? . . . . . . . . . . . . . . . . . . . . 10Q1.9 Why is hedging using derivatives termed “risk transfer”? . . . . 12Q1.10 What happens to market quality and price formation on thecash market once derivatives trading commences? . . . . . . . . . 12
2 Forward contracts 15
Q2.1 Why is forward contracting useful? . . . . . . . . . . . . . . . 15Q2.2 What is leverage? . . . . . . . . . . . . . . . . . . . . . . . . 15Q2.3 What are the problems of forward markets? . . . . . . . . . . . 15Q2.4 Why do forward markets have poor liquidity? . . . . . . . . . . 16Q2.5 Why are forward markets afflicted by counterparty risk? . . . . 16Q2.6 How does counterparty risk affect liquidity? . . . . . . . . . . . 16
3 Futures 19
Q3.1 What is pricetime priority? . . . . . . . . . . . . . . . . . . 19Q3.2 What is a futures contract? . . . . . . . . . . . . . . . . . . . . 19Q3.3 How does the futures market solve the problems of forwardmarkets? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Q3.4 What is cash settlement? . . . . . . . . . . . . . . . . . . . . . 20Q3.5 What determines the price of a futures product? . . . . . . . . . 20Q3.6 Doesn’t the clearing corporation adopt an enormous risk by giv-ing out credit guarantees to all brokerage firms? . . . . . . . . . . 213
www.moneycontrol.com

Activity (12)

You've already reviewed this. Edit your review.
1 hundred reads
1 thousand reads
imranraza16 liked this
wimpievanniekerk liked this
dinubabu liked this
Sajeev Venu liked this
90271501 liked this
sam7040 liked this
Gevita Gv liked this
vishwa1223 liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->