Question Bank

(Sem 5)

TY-BFM

Derivatives Market
Define Derivatives. What are the types of Derivatives? What are the types of Generic Derivatives?
1)

2) a. Differentiate between Forward Contracts and Future Contracts b. Differentiate between different participants in the market.

3)

Explain the following terms:

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
6)

all positions possible in the market.

1

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. 495 c.950. 9) A trader goes long on 5 lots of Tata Steel CA with strike price of Rs. CMP of the share is Rs. the process of creating Synthetic Short Put b. 11) Give a detailed analysis of Vertical Bullish Spreads with the help of an example using puts. The trader wants to hedge is position for the downfall expected in the portfolio value.@ Rs. 520 e. 8) a. TY-BFM 7) What do you mean by Synthetic Positions? What is the purpose of creating Synthetic Positions? Explain with the help of Examples. Guide him what should he do.495. One Lot size of Tata Steel is 1000.1020. Explain Positions. 540 10) A trader has a position of 1000 shares of Reliance. The CMP of Tata Steel is Rs. 2 . What are the different payoff of the trader at the following levels of the share: a.Question Bank (Sem 5) b) Draw comparisons between Futures and Options. 500 d. Explain the process of creating Synthetic Long Call Positons. He expects the share price to go upto Rs. 480 b.500/. 5/-.

45 0. what profit or loss will you make on maturity if the price of A at that time is Rs.25 6 6. 3 . 43/14) a. If B’s price is Rs. If you had purchased five 3-month puts on C.30 Put premium 3 6 months months 0. The direction of which is unknown to you. If your client wrote five 6-month call options on B’s share. What is a Reverse Collar? 16) What is Covered Put? Explain Collar. determine the value of five 6 month put contracts at their maturity date 3. What is a Covered Call 15) a. How do you trade explain with the help of an example.35 1. If you had purchased five 3-month call options of C and the price of C is Rs.00 0. If you have an view in the market about a direction what changes will you make in the trades.32/5. what would his profit or loss be on maturity if share price then was Rs. what is his profit or loss on maturity if price of B at that time is Rs. If your client wrote five 6-month put options on B. 32 on maturity. determine your profit or loss on the investment 4. 43/6. 57/2.65 Shar e A B C Current price 52 40 35 Strike price 50 45 30 1. What is Protected Call? Explain b. 35 on maturity of the 6 month option. what would be your profit or loss on maturity if the share price was Rs. Explain the concepts of Protected Put b.Question Bank (Sem 5) TY-BFM 12) You expect a very substantial move in the market. If you purchase one 3 month call contract on A.50 6.05 5. 13) Solve the following: Call premium 3 months 6 months 3 4 1 1.

2010/.410 Time for expiration= 30 days Interest rate = 12% p. 2010. What is the difference between Condor and Butterfly. Gamma c. 4 . Calculate future prices from the following? 21) Spot Price= 5. Lambda Chintan is on the view that Bajaj Auto has a given a position break out at current market price of Rs. 2010. Not beyond that which option. 19) Explain the Option Greeks a. 2040. 20) 1 month 2010 call 15 1 month 2050 call 5 1 month 1980 call 35 1 month Explain the basis and concept of future pricing with the help of an example.a 22) Explain the exercise and Assignment Process. 23) Explain the comprehensive Risk management Mechanisms adopted by NSCCL. 18) Explain the strategy of Strip and Strap in detail. and prepare a table to show pay off at price levels of 1980. 2070. Delta b. Also show the exercise settlement computation.Question Bank (Sem 5) TY-BFM 17) Explain the strategy of Condor. Spread can he use. Vega d.but he also believes that the price shall only go upto 2040.

Question Bank (Sem 5) 24) What are the different types of margins 25) Expalin the accounting process of futures 26) Expalin the accounting procees of options TY-BFM Foreign Exchange Markets 1) Important terms and concepts a) Direct quotes b) Indirect quotes c) American quotes d) European quotes e) Bid/offer rate f) Ask/sell rate g) Vehicle currency h) Spot transaction i) Forward transactions j) Cross rates k) Correspondent banks l) Non-deliverable forward 2) Difference between direct and indirect rates? 3) What are nostro. vostro and loro accounts? 5 .

Question Bank (Sem 5) 4) What TY-BFM is triangular arbitrage? Explain with the help of an example? 5) Explain in brief gold exchange standards? 6) Explain Bretton woods system? 7) What is triffine paradox? 8) Explain in brief Smithsonian agreement 9) What is fixed exchange rate system? Give the case for and 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 India’s foreign exchange market and inbound and outbound investment 19) What is the role of RBI in directing and controlling forex market in India 6 .

Question Bank (Sem 5) 20) TY-BFM What is capital account convertibility? What are its pros and cons 21) What are the learning from Asian financial crisis with reference to capital account convertibility 22) What is the impact of Indian MNC’s 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? ============================================== ============================ 7 .

Why is there a need to provide protection to the retail investor? 10. Explain insider trading with the help of an example? 4. Explain the factors determining the profile of an investor? 7. What are the benefits of a regulated / controlled market? 2. Discuss briefly the nature of savings and investments in India? 5. What are 'Vanishing Companies'? Discuss about the "vanishing companies of Ninetees". Explain the features of Investments. 11. What is meant by "investor profile". 6. Explain with reasons whether the profile of Indian investor changing? 8. What is an investment plan? Discuss the factors determining investment decisions of an Indian investor? 9. What is an IPO? Discuss the various economic offences occurred through IPO Scams? 12.Question Bank (Sem 5) TY-BFM Regulation of Securities Markets 1. Discuss the various entities governing the securities market in India? 8 . Define the terms Savings and Investments. Define regulation. What is the need for regulating financial markets in India? 3.

16. 17. 6. 8. 1956.Question Bank (Sem 5) 13. 18. 4. 7. 19. =======================X======================== == Global Capital Markets 1 2. What are the major markets of the world and their characteristic? Name some of the emerging stock markets of the world? What is multiple listing and its advantages and disadvantages? What are depositary receipts? What are ADR’s? What are GDR’s? What are the parties involved in ADR/ GDR? What the different types of ADR’s? 9 . 14. 1992 Depositories Act. 1996 Insurance Acts in India Forward Market Commission (FMC) Insurance Regulatory and Development Authority (IRDA) (India)'. 15. 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. 3. a) b) c) d) e) f) g) TY-BFM 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'. 5.

1 2. 1 0. 1 8. 2 1. 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 CRA’s? Explain the procedure for using Euro Bonds? Explain the obstacles to international investments? Insurance Fund Management 10 . 2 0. What is the role of media and technology in the global financial markets? What the benefits of Global Capital Markets? (Diversification). 2 2. 1 5. TY-BFM Give brief history and explain about global financial markets. 1 1. 1 9. 1 7. 1 6.Question Bank (Sem 5) 9. 1 4. 1 3. 2 3.

4 Explain in detail the principles of insurance.8 Write a note on formation of Malhotra Committee and state its objectives and recommendations. Explain different types of annuities. Define insurance and explain the benefits of insurance.3 a. When IRDA was formed? What is the role played by IRDA for insurance sector in India? 7M Q. Discuss ‘Unit Linked Insurance Policies’ in detail. 7M Q. Write a shot note on types of insurance organizations existing in India. 8M b.Question Bank (Sem 5) Q. Lapsation of policy c. 8M b. 7M Q.1 TY-BFM a. Surrender Value 11 . Discuss the history and evolution of insurance industry in India.7 a. Nomination d. 8M b.2 Describe different types of insurance and discuss the risk covered by it. What are the different types of insurance organizations? Briefly discuss. 15M Q. 15M Q.6 a. 7M Q.9 Explain the following concepts briefly: 15M a. Distinguish between ‘Annuity Contracts’ and ‘Life insurance Contracts’. 8M b. 7M Q. Assignment e. 15M Q. Days of grace b.5 a. Briefly describe the characteristics of insurance. What are the different types of life insurance policies prevailing in market? 8M b.

7M Q. 8M b.13 a.10 a. 8M Q. Distinguish between ‘Nomination’ and ‘Assignment’ of insurance policy. Explain the various sources of ‘investment funds’ for insurance company.15 a.14 a. Financial underwriting II. What is the meaning of ‘mortality risk’? Explain the relevance of mortality rate for life insurance. Provide the details of ‘exposure norms’ prescribed by IRDA for investments of insurance company.Question Bank (Sem 5) TY-BFM Q. Discuss the classification of physical hazards/ risks from underwriting perspective. Briefly describe the process of valuation of insurance policies. 8M b. 7M b. 7M Q. 7M Q. 7M b. 8M b. Explain the concept of ‘underwriting’. Discuss the principles of investment in detail. Medical underwriting Q. What are the physical factors impacting the risk related to life of policy holder? 8M b.11 a. What are the several options of granting bonus to insurance policies? 7M 12 . Explain different sources of risk related information. Write short notes on: 8M I. What are the different options available to avoid forfeiture of policy? Explain briefly.12 a.

15M Q. Define premium and discuss the concept of risk premium. 13 . Compute premium in following cases: I. 7M Q.150000.2 per thousand. 50000: Rs.50 per thousand Loading due to occupation: Rs.55 No rebate for mode of payment Rebate for sum assured above Rs.50 per thousand Calculate half yearly premium for Sum Assured of Rs.16 a. What are the different investment instruments where funds can be invested by insurance companies? 8M b. 2. Distinguish between mutual fund schemes and unit linked insurance plans. 4M Tabular premium: Rs.33.18 Describe the various marketing techniques adopted by insurance companies for promotion of insurance products. II. 7M b.17 a. 8M Q.1. 7M b. net premium and level premiums.19 a. Tabular premium: Rs.10 4M Sum Assured: Rs.Question Bank (Sem 5) TY-BFM Q. Briefly explain the process of risk management process and tools for controlling risks.2 per thousand Double Accident Benefit rider cost: Rs. Define risk and explain classification of risk.100000 Rebate for yearly payment of premium: Rs.

7M Q.25 a. What is the role of an actuary in the insurance sector? 8M b. What are the subject matters covered by marine insurance? 8M b. 15M Q. 4 per thousand. Write a short note on ‘Ombudsman’. Briefly explain different types of fire insurance policies. What is surplus and what are various sources of surplus? 7M Q. Explain the classification of investment funds of the life insurance company 8M b.22 a. Q.Question Bank (Sem 5) TY-BFM Rebate for half yearly payment of premium: Rs. Define risk and distinguish between risk and uncertainty.21 Write a detailed note on procedure for setting up of an insurance company. Double Accident Benefit rider: Rs.20 a. State the ‘investment pattern’ prescribed by IRDA for different classes of investment funds of life insurance company 7M.1 per thousand Occupation loading: Rs. Write a short note on ‘Re-insurance’ 7M b. 8M b. What is ‘health insurance’? Discuss various types of health insurance policies. 14 . 7M Q.23 a.1 per thousand. 8M Q. Calculate premium for yearly payment.24 a.

Relevance of Portfolio Management in different sectors of Financial Markets.Question Bank (Sem 5) TY-BFM ============================================== ============================== Portfolio Management Chapter 1 1. Insurance Investment c. Evaluate Equity as an Investment? 5. Explain various Tax Saving Schemes. Speculation & Genuine Investment. 6. Short Notes: a. Bank Deposits Chapter 2 15 . What are Mutual Funds? Explain its various schemes with example. Explain the need for designing an Investment Portfolio. 8. What is Investment? Explain the objectives of Investment? 2. Define Investment? Explain difference between Gambling. 4. 7. 3. Real Estate b. What is Portfolio Management? Explain its objectives. Government Securities d. 9.

Capital Market Line d.Question Bank (Sem 5) TY-BFM 1. 4. Beta Calculation d. Explain Modern Theory/Markowitz Theory. What is Capital Assets Pricing Model (CAPM)? Explain its importance. Security Market Line b. Explain the difference between Traditional & Modern Theory of Portfolio. 5. 3. CAMP Chapter 3 1. 4. Expected Return b. Compare Treynor. Problems: a. Explain various factors affecting performance measures. Optimal Portfolio 6. Standard Deviation c. 2. What is Portfolio Evaluation? 16 . Short Notes: a. Explain different types of Risks in Investment. 3. What is Efficient Market Hypothesis (EMH)? Explain its types. Arbitrage Pricing Theory c. 2. Variance e. Sharpe & Jenson portfolio performance measure. Holding Period Return f.

3. Explain various Portfolio Management Services (PMS) in India. 2. Short Notes: a.Question Bank (Sem 5) 5. Future prospects of Portfolio Management Services (PMS) b. Explain SEBI Norms for Portfolio Management Services (PMS). Explain performance Evaluation Measures. Jenson TY-BFM Chapter 4 1. Registration Procedure of Portfolio Managers 17 . 6. Problems: a. Treynor b. 4. Sharpe c. Explain the procedure for setting up of Portfolio Management Services (PMS).

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