TY BFM - FINANCIAL DERIVATIVES -

INTERNALS
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INTERNAL EXAM

QUESTION PAPER

If you purchase a $100,000 interest-rate futures contract for 110, and the price
of the Treasury securities on the expiration date is 106 *

your profit is $4000.

your loss is $4000.

your loss is $6000.

your profit is $10,000.

The more the interest rate is , lower will be *

Call premium

Put Premium

Spot price

Future price

Suppose Nifty options trade for 1, 2 and 3 months expiry with strike prices of
1850,1860, 1870, 1880, 1890, 1900, 1910. How many different options contracts
will be tradable? *

27

42

18

24

Stock of INFY has CMP - Rs.50, EP- 45, PREMIUM -Rs. 5 Find IV AND TV *

5,5

5,0

0,5

0,0
An option that can be exercised at any time up to maturity is called *

swap.

stock option.

European option.

American option.

Intrinsic Value can be negative in CE *

True

False

Arbitrage gains arises due to *

Imperfections

Volatility

Deviations

Uptrend

The seller of an option has the *

right to buy or sell the underlying asset.

the obligation to buy or sell the underlying asset.

ability to reduce transaction risk.

right to exchange one payment stream for another.

Future price is spot price + *

Cost of carry

Option premium

Interest rates

None of the above

The difference between Spot and Future of underlying is called as *

Future price

Spot price

Basis

Net Price
Financial derivatives include *

Stocks.

Bonds.

Futures.

None of the above

The number of Options contracts outstanding is called *

liquidity.

volume.

float.

open interest.

turnover.

Derivatives are instruments related to settlement of obligations at a *

Present date

Future date

Uncertain date

Immediate

The amount by which an option is ITM is called *

Intrinsic Value

Time Value

Option value

None of the above

In case of CE when ruling spot price is exceeds EP then option is *

ITM

ATM

OTM

None of the above

If you sold a short futures contract you will hope that bond prices *

rise.

fall.

are stable.

fluctuate.
 The amount paid for an option is the *

Strike price.

premium.

discount.

commission.

yield.

Which of the following is not a financial derivative? *

Stock

Futures

Options

Forward contract

The advantage of forward contracts over futures contracts is that they *

are standardized.

have lower default risk.

are more flexible.

both (a) and (b) are true.

In Horizontal spread an investor buys and writes an option of *

Different Expiration dates

Different Exercise Price

Different Option Price

Same Exercise Price

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