Derivatives Dealers(6)

Q1-In future contracts , the contract maturity period is defined by-

• The exchange 
• by the RBI
• by the parties to the contracts 
• by the government 

Q2-A long or short position in a future contract can be closed easily by initiating a reverse trade.

• True
• False
• True only in Mumbai
• True only in delhi

Q3-A warrant could be understood as

• A derivative instrument
• Akind of equity share
• A kind of debenture 
• A kind of financial bond 

Q4-Use of index future for hedging helps us eliminating the following risk

• Stock specific risk
• All possible risk  
• No risk 
• Market risk

Q5- Systematic risk is an investment risk peculiar to a company which can be reduced by diversifying one's portfolio

• False 
• True 
• True only in africa 
• True only in japan 

Q6- One of the method to control financial risk is to have

• Exposure limits 
• Un-interrupted power supply unit 
• Speculate heavily 
• None of the above

Q7-Credit risk on a derivative transaction includes

• Power outage 
• Riots in the country 
• Credit exposure in the event of default and the probability of a counter party's default.
• Bank strikes

Q8-In case on NSE Index futures, The mpnthly series matures on

• First Thursday of the month 
• Last Thursday of the month 
• First Wednesday of the month 
• Last Wednesday of the month  

Q9-Which of the following can be the underlying in a financial future ?

• Sugar
• T Notes
• Coffee
• Pork bellies 

Q-10-You sold January satyam futures @ Rs 248 and the lot size is 1200. What is your profit or loss If you purchase at Rs 274?

• -30,200
• -31200 
• -32200
• none of the above 

Solution-
Purchase Price : 274
Sales Price: 248
Loss per unit: 26
Lot size : 1200
Loss = (274-248)*1200 = 31200