Derivatives Dealers 17

1-A forward contract is an agreement to buy a certain asset at a certain future date for a price to be
determined in the future.
a) True
b) False
c) True only in Europe
d) True only in Africa

2-In the olden days, the area within the exchange where trading was conducted through open outcry,was known as the Pit.
a) True
b) False
c) none of the above

3-If the price of the underlying asset rises sharply after the initiation of a futures contract
a) the long position becomes profitable
b) the long position becomes unprofitable
c) the short position becomes profitable
d) none of the above

4-You can buy index futures in India regardless of whether you own the index shares or not.
a) True
b) False
c) True only in Mumbai
d) True only in Delhi

5-A scarce supply of the actual commodity generally causes futures price to fall.
a) True
b) False
c) True only in Mumbai
d) True only in Delhi

6-How are prices fixed in case of a forward contract?
a) They are decided at the time of entering into the contract.
b) They are decided at the end of the contract period
c) They are decided and revised from time to time based on market condition
d) None of the above

7-Future contracts are usually much more liquid than the Forward contracts
a) True
b) False
c) None of the above

8-The settlements of a forward contracts takes place on the date of  maturity
a) True
b) False
c) None of the above

9-You bought January Satyam Futures @ Rs 268 and the lot size is 1,200. What is your profit (+)
or loss(-) if you sell at Rs 225 ?
a) -50,600
b) -51,600
c) -52,600
d) None of these

10-  . . . . . .The stock index future were first introduced at CBOT in USA
a) True
b) False (Ans-Kansas city board of trade)