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Derivatives Dealers (2)

Q1-If some one is 'bearish' in the Market

  1. He Expects Market to rise 
  2. He Expects market to fall
  3. He expects market to close 
  4. Hes expects to market to close. 

Q2-The value of a derivatives instrument 

  1. Is fixed
  2. Depends on the value of an underlying asset
  3. Is reset at fixed level
  4. None of the above

Q3-In which market Contract of each party faces of risk of default?

  1. Forward 
  2. Cash 
  3. Futures 
  4. Options

Q4-The Future Contract are thus refined Forward  contract in terms of standardization, performance, guarantee and liquidity  .

  1. True
  2. False

 Q5-A farward contract has zero value for both the parties involved .

  1. True
  2. False

Q6-A long or  a short position in a Futures contract can be closed easily by initiating a reserve trade

  1. True 
  2.  False

Q7-The  market Impact Cost on a trade of rs 3 million of the full NIFTY works out to be about 0.5%.This means  that if NIFTY is at 2000, a buy order will go through at roughly ....

  1. 2010
  2. 2050 
  3. 2500 
  4. None of the above 

Q8-If liquidity is poor , impact cost would be ....

  1. High
  2. Low 
  3. Moderate 
  4. None of the above

Q9-At the point of entering into the future contract 

  1. Both the buyers and seller pay Initial Margin to the exchange
  2. The buyer alone pays Initial margin to the exchange
  3. The seller alone pays the initial margin 
  4. No margin are payable to the exchange by the buyer or the seller

Q10-If you have bought a future contract and the the price drops, you will be making a profit

  1. True
  2. False
  3. Sometimes true
  4. Some times false

This post first appeared on SAMPLE PAPER - NCFM, please read the originial post: here

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Derivatives Dealers (2)


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