a) For the derivatives exchange, the trading members net worth shall be fixed by:

a) Sebi
b) Stock Exchange
c) SCRA
d) Clearing Member
b) BSE Stands for:
Bombay stock exchange
Bombay state exchange
Brihanmumbai stock exchange
Bombay stock estate

c) Although derivatives can be used as a speculative instruments, business most often used them
too:
Hedge
Offset Debt
Appease Stockholders
Attract customers

d) Market makers add:

Speculation to market

Liquidity to the market

Fluctuations to the market

Nothing to the market

e) If someone is bearish in the market, he expects the market to:

To rise
To fall
To move sideways
To Close

f) Tick Size is:

Maximum daily movement permitted in the price of the contract

Maximum permitted price movement during the entire life of the contract

Minimum permitted price movement in two futures contract

Maximum price for the year

g) Each forward contract:

Can be structured as required by the buyer and seller

Will have the same specifications

 Specifications are decided by the SEBI

Rules by NSE

h) Spot Price is same as:

Strike price
Exercise price
Price of the underlying
Forward Price
i) Selling short a stock can be used to denote that the seller:

Does not own the stock he has to deliver

Has to deliver the stock after a long time

Owns the stock he his supposed to deliver

Has to deliver the stock along with interest

j) Hedgers and Speculators strike a balance due to their needs because:

Hedger has to take the risk while speculator has to give up risk

Hedger and speculators have to take risk

Hedger and speculator have to give up risk

Hedger avoids risk while speculator takes risk.

k) Which of the following derivative product can be classified as American & European?
Forwards
Futures
Options
Swaps

l) In future contract the contract maturity period is defined by:

Exchange

RBI

Parties of the contract

Government

j) A trader brought Jan. Nifty Mini contracts at NSE. How will the trader close out this position in
the market.

Sell Jan Nifty Mini contracts

Sell Feb Nifty Mini contracts

 Buy March Nifty mini contracts

Sell March Nifty Mini contracts

m) Currently Derivatives are traded in which countries options:

American

European

African

Asian

n) In an index future contract , if the tick size is 0.1 of an index point and the index multiple is at Rs
50, a tick is valued at:
5.00
12.5
0.75
0.5

o) A future contract is standardized version of a:

Put option

Call option

Swap option

Forward contract

p) Which of the following is not the features of future contract?

Only the contract size and the futures price is set by the market participants
Daily settlement
Initial margin deposit is required
A long position may be offset by shorting the exact same contract

q) Initial margin is also referred to:

Vertical margin
Variation margin
Performance margin
Spread margin

r) For futures what is the opening day of March series of index futures contract:

1st trading day after last Thursday in December

1st trading day after last Thursday in February

1st trading day after last Thursday in January

 1st trading day after last Friday in December

s) In future monthly series matures/expires on:

1st Thursday of the month

Last Thursday of the month

1st Friday of the month

Last Friday of the month

t) The margining for futures is based on:

Profit at risk
Volume at risk
Value at risk
Variable at risk

u) In terms of which of the following criteria, futures are not an improvement over forwards

Credit risk

Liquidity

Flexibility

Transparency

v) With regards to future contract, the long position is held by:

The trader who bought the contract at discount
The trader who plans to hold the contract open for time being
The trader who commits to purchase on the delivery date
The trader who commits to deliver on the delivery date.

w) A broker has 2 clients A & B. A has purchased and sold 250 and 350 contracts respectively and B
has purchased and sold 550 and 350 contracts respectively in a Nifty Futures series. What is the
outstanding liability of the broker.

360

300

250

1500

x) A trader is short in the spot and long in the futures. If the basis is positive and decreases it leads
to.

Loss

Gain
Wealth remaining the same

No profit no loss

y) In futures trading initial margin is deposited with the broker by.

Seller of the contract
Buyer of the contract
Both the parties
Exchange
z) The value of the derivative instrument .
Is fixed
Depends on value of underlying
Reset at fixed intervals
Previous day closing price
1) The shares of RST Ltd are currently quoted at rs 200. Futures is at 210. If you buy the futures you
expect the price to move:

Down by 5 %
Down by 7 %
Up by 15%
Up by 4 %

Apart from this I have put all the ttype of sums calculated in the class on future pricing. All the 3
formula sums are there.
Kindly excuse my formatting. The right answers are highlighted in red.
Good Luck for your exams and stay indoors and be safe.