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TY BFM Question Bank
TY BFM Question Bank
(Sem 5)
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Derivatives Market
Define Derivatives. What are the types of Derivatives? What are the types of Generic Derivatives?
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2) a. Differentiate between Forward Contracts and Future Contracts b. Differentiate between different participants in the market.
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Contract Size, Contract Multiplier, Tick Size, Open Interest, Volume, Initial Margin, Mark to Market Margin, SPAN.
4) What are the effects of the following on the Call and Put Options : a. Cash Price of the asset b. Strike Price c. Volatility of the underlying Price. d. Time to Expiration e. Interest Rate.
5) a. What is Hedging? Explain different types of Hedging used in the Market. b. Write a Note on Arbitrage. Explain different types of Arbitrage.
a) What is Options? What are the types of Options? Explain with the help of Pay off charts for
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b) Draw comparisons between Futures and Options.
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7) What do you mean by Synthetic Positions? What is the purpose of creating Synthetic Positions? Explain with the help of Examples.
8) a. Explain Positions.
the
process
of
creating
Synthetic
Short
Put
9) A trader goes long on 5 lots of Tata Steel CA with strike price of Rs.500/- @ Rs. 5/-. The CMP of Tata Steel is Rs.495. One Lot size of Tata Steel is 1000. What are the different payoff of the trader at the following levels of the share: a. 480 b. 495 c. 500 d. 520 e. 540 10) A trader has a position of 1000 shares of Reliance. The trader is of the opinion that due to the market conditions there is a temporary down fall in the share price but in the long term the price will go up. The trader wants to hedge is position for the downfall expected in the portfolio value. He expects the share price to go upto Rs.950. CMP of the share is Rs.1020. Guide him what should he do.
11) Give a detailed analysis of Vertical Bullish Spreads with the help of an example using puts.
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12) You expect a very substantial move in the market. The direction of which is unknown to you. How do you trade explain with the help of an example. If you have an view in the market about a direction what changes will you make in the trades.
13)
Solve the following: Call premium 3 months 6 months 3 4 1 1.25 6 6.30 Put premium 3 6 months months 0.35 1.05 5.50 6.00 0.45 0.65
Shar e A B C
Current price 52 40 35
Strike price 50 45 30
1. If you purchase one 3 month call contract on A, what profit or loss will you make on maturity if the price of A at that time is Rs. 57/2. If Bs price is Rs. 35 on maturity of the 6 month option, determine the value of five 6 month put contracts at their maturity date 3. If you had purchased five 3-month call options of C and the price of C is Rs. 32 on maturity, determine your profit or loss on the investment 4. If you had purchased five 3-month puts on C, what would be your profit or loss on maturity if the share price was Rs.32/5. If your client wrote five 6-month call options on Bs share, what is his profit or loss on maturity if price of B at that time is Rs. 43/6. If your client wrote five 6-month put options on B, what would his profit or loss be on maturity if share price then was Rs. 43/14) a. Explain the concepts of Protected Put
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17) Explain the strategy of Condor. What is the difference between Condor and Butterfly.
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19)
Chintan is on the view that Bajaj Auto has a given a position break out at current market price of Rs.2010/- but he also believes that the price shall only go upto 2040. Not beyond that which option. Spread can he use, and prepare a table to show pay off at price levels of 1980, 2010, 2040, 2070, 2010.
20)
1 month
Explain the basis and concept of future pricing with the help of an example. Calculate future prices from the following?
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Spot Price= 5,410 Time for expiration= 30 days Interest rate = 12% p.a 22) Explain the exercise and Assignment Process. Also show the exercise settlement computation. 23) Explain the comprehensive Risk management Mechanisms adopted by NSCCL.
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24) What are the different types of margins 25) Expalin the accounting process of futures 26) Expalin the accounting procees of options
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2) Difference between direct and indirect rates? 3) What are nostro, vostro and loro accounts?
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4) What
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against fixed exchange rate system 10) What is floating exchange rate system ?give the case for and
against floating exchange rate system 11) 12) 13) 14) 15) 16) 17) What is crawling peg and adjustable peg system What is the exchange rate mechanism in India Short note -CHIPS Short note -CHAPS Short note risk element in foreign exchange markets Need and importance of foreign exchange management What are the various methods adopted for foreign exchange
management 18) What is the impact of LPG on Indias foreign exchange market
and inbound and outbound investment 19) What is the role of RBI in directing and controlling forex
market in India
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cons 21) What are the learning from Asian financial crisis with reference
What is the impact of Indian MNCs on foreign exchange? What is the FEMS in the Indian forex market? What are Eurocurrency markets and factors which led to their
23) 24)
growth? 25) 26) Special features of the euro currency markets What is LIBOR?
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India?
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13. 1956. 14. 15. 16. 17. 18. 19. a) b) c) d) e) f) g)
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Explain briefly the Securities Contract (Regulation) Act of What are the special regulatory requirements for Derivative Critically evaluate the functions of the 'Department of
Markets? Company Affairs'. Describe the role of the 'Department of Economic Affairs What are the functions of RBI? Is there a need for Self-Regulation in Financial Markets? Why? Write Short Notes On: Growth of Indian Securities Markets Financial Planning and Forecasting SEBI Act, 1992 Depositories Act, 1996 Insurance Acts in India Forward Market Commission (FMC) Insurance Regulatory and Development Authority (IRDA) (India)'.
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9. 1 0. 1 1. 1 2. 1 3. 1 4. 1 5. 1 6. 1 7. 1 8. 1 9. 2 0. 2 1. 2 2. 2 3.
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Give brief history and explain about global financial markets. What is the role of media and technology in the global financial markets? What the benefits of Global Capital Markets? (Diversification). What are mergers and acquisitions? What is the need for Mergers and Acquisitions? What the advantages of Mergers and Acquisitions? What are domestic bonds? What are Euro bonds? What are the foreign bonds? What are the participants in global bond markets? What are the credit rating agencies and what is their role in capital markets? What are the global rating agencies in the world? Explain the advantages and disadvantages of CRAs? Explain the procedure for using Euro Bonds? Explain the obstacles to international investments?
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Q.1
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a. Define insurance and explain the benefits of insurance. 8M b. Briefly describe the characteristics of insurance. 7M
Q.2 Describe different types of insurance and discuss the risk covered by it. 15M Q.3 a. What are the different types of insurance organizations? Briefly discuss. 8M b. Write a shot note on types of insurance organizations existing in India. 7M Q.4 Explain in detail the principles of insurance. 15M
Q.5 a. What are the different types of life insurance policies prevailing in market? 8M b. Discuss Unit Linked Insurance Policies in detail. 7M Q.6 a. Explain different types of annuities. 8M b. Distinguish between Annuity Contracts and Life insurance Contracts. 7M Q.7 a. Discuss the history and evolution of insurance industry in India. 8M b. When IRDA was formed? What is the role played by IRDA for insurance sector in India? 7M Q.8 Write a note on formation of Malhotra Committee and state its objectives and recommendations. 15M Q.9 Explain the following concepts briefly: 15M a. Days of grace b. Lapsation of policy c. Nomination d. Assignment e. Surrender Value
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Q.10 a. Distinguish between Nomination and Assignment of insurance policy. 8M b. What are the different options available to avoid forfeiture of policy? Explain briefly. 7M Q.11 a. Explain the concept of underwriting. Discuss the classification of physical hazards/ risks from underwriting perspective. 7M b. Write short notes on: 8M I. Financial underwriting II. Medical underwriting Q.12 a. What are the physical factors impacting the risk related to life of policy holder? 8M b. Explain different sources of risk related information. 7M Q.13 a. What is the meaning of mortality risk? Explain the relevance of mortality rate for life insurance. 7M b. Explain the various sources of investment funds for insurance company. 8M Q.14 a. Discuss the principles of investment in detail. 8M b. Provide the details of exposure norms prescribed by IRDA for investments of insurance company. 7M Q.15 a. Briefly describe the process of valuation of insurance policies. 8M b. What are the several options of granting bonus to insurance policies? 7M
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Q.16 a. Define risk and explain classification of risk. 7M b. Briefly explain the process of risk management process and tools for controlling risks. 8M Q.17 a. What are the different investment instruments where funds can be invested by insurance companies? 8M b. Distinguish between mutual fund schemes and unit linked insurance plans. 7M Q.18 Describe the various marketing techniques adopted by insurance companies for promotion of insurance products. 15M Q.19 a. Define premium and discuss the concept of risk premium, net premium and level premiums. 7M b. Compute premium in following cases: I. 4M Tabular premium: Rs.55
No rebate for mode of payment Rebate for sum assured above Rs. 50000: Rs.2 per thousand Double Accident Benefit rider cost: Rs.1.50 per thousand Loading due to occupation: Rs. 2.50 per thousand Calculate half yearly premium for Sum Assured of Rs.150000.
II.
Tabular premium: Rs.33.10 4M Sum Assured: Rs.100000 Rebate for yearly payment of premium: Rs.2 per thousand.
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Rebate for half yearly payment of premium: Rs.1 per thousand. Double Accident Benefit rider: Rs.1 per thousand Occupation loading: Rs. 4 per thousand. Calculate premium for yearly payment. Q.20 a. What is the role of an actuary in the insurance sector? 8M b. Write a short note on Ombudsman. 7M Q.21 Write a detailed note on procedure for setting up of an insurance company. 15M Q.22 a. What are the subject matters covered by marine insurance? 8M b. Briefly explain different types of fire insurance policies. 7M Q.23 a. Write a short note on Re-insurance 7M b. What is health insurance? Discuss various types of health insurance policies. 8M Q.24 a. Define risk and distinguish between risk and uncertainty. 8M b. What is surplus and what are various sources of surplus? 7M Q.25 a. Explain the classification of investment funds of the life insurance company 8M b. State the investment pattern prescribed by IRDA for different classes of investment funds of life insurance company 7M.
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Portfolio Management
Chapter 1 1. What is Investment? Explain the objectives of Investment? 2. Define Investment? Explain difference between Gambling, Speculation & Genuine Investment. 3. What is Portfolio Management? Explain its objectives. 4. Evaluate Equity as an Investment? 5. Explain various Tax Saving Schemes. 6. What are Mutual Funds? Explain its various schemes with example. 7. Explain the need for designing an Investment Portfolio. 8. Relevance of Portfolio Management in different sectors of Financial Markets. 9. Short Notes: a. Real Estate b. Insurance Investment c. Government Securities d. Bank Deposits Chapter 2
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1. Explain the difference between Traditional & Modern Theory of Portfolio. 2. Explain Modern Theory/Markowitz Theory. 3. What is Capital Assets Pricing Model (CAPM)? Explain its importance. 4. Explain different types of Risks in Investment. 5. Short Notes: a. Security Market Line b. Arbitrage Pricing Theory c. Capital Market Line d. Optimal Portfolio
6. Problems: a. Expected Return b. Standard Deviation c. Beta Calculation d. Variance e. Holding Period Return
f. CAMP
Chapter 3 1. What is Efficient Market Hypothesis (EMH)? Explain its types. 2. Explain various factors affecting performance measures. 3. Compare Treynor, Sharpe & Jenson portfolio performance measure. 4. What is Portfolio Evaluation?
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5. Explain performance Evaluation Measures. 6. Problems: a. Treynor b. Sharpe c. Jenson
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Chapter 4 1. Explain various Portfolio Management Services (PMS) in India. 2. Explain the procedure for setting up of Portfolio Management Services (PMS). 3. Explain SEBI Norms for Portfolio Management Services (PMS). 4. Short Notes: a. Future prospects of Portfolio Management Services (PMS) b. Registration Procedure of Portfolio Managers
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