Practice Test

Q1) Daily market to market settlement of futures takes place on ______ basis Show Answer

Q2) Forward contracts are _______ contracts Show Answer

Q3) You sold one XYZ Stock Futures contract at Rs. 273 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265? Show Answer

Q4) Margins in ‘Futures’ trading are to be paid by _______ Show Answer

Q5) When the near leg of the calendar spread transaction on index futures expires, the farther leg becomes a regular open position Show Answer

Q6) Santosh is bearish about ABC Ltd. And sells ten one-month ABC Ltd. Futures contracts at rs.2,96,000.On the last Thursday of the month, ABC Ltd. Closes at Rs.310.He makes a ________ Show Answer

Q7) The beta of TELCO is 0.8. A person has a long TELCO position of Rs.800,8000 coupled with a short Nifty position of Rs. 600,000.Which of the following is TRUE? Show Answer

Q8) The beta of ACC is 1.5.A person has a long TELCO position of Rs. 900,000 coupled with a short nifty position of Rs. 800,000.which of the following is TRUE? Show Answer

Q9) Santosh is bearish about ABC Ltd. And sells 10 one-month ABC Ltd. Futures contracts at Rs.3,96,000.on the last Thursday of the month, ABC Ltd. closes at Rs.410.He makes a ______. Show Answer

Q10) Santosh is bullish about ABC Ltd. And buys 10 one-month ABC Ltd. Futures contracts at Rs.3,96,000.on the last Thursday of the month, ABC Ltd. closes at Rs.410.He makes a ______. Show Answer

Q11) Mr. A sells futures contract of M/s. XYZ Ltd. (Lot size: 1000) expiring on 29/sep/2005 for Rs. 300.The spot price of the share is Rs. 290.The securities transaction tax thereon would be_________. Show Answer

Q12) Santosh is bearish about ABC Ltd. And sells ten one-month ABC Ltd. Futures contracts at rs.2,96,000.On the last Thursday of the month, ABC Ltd. Closes at Rs.310.He makes a ________.(assume one lot=100) Show Answer

Q13) The beta of ICICI Bank is 1.5. A person has a long position of Rs. 400,000 of ICICI Bank. Which of the following gives a complete hedge?. Show Answer

Q14) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.252? Show Answer

Q15) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.259? Show Answer

Q16) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.264? Show Answer

Q17) You sold one XYZ future contracts Rs.138 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.154? Show Answer

Q18) You sold one XYZ future contracts Rs.278 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.259? Show Answer

Q19) You sold one XYZ future contracts Rs.278 and the lot size is 1200.what is your profit (+)or loss(-),if you purchase the contract back at Rs.262? Show Answer

Q20) Futures of trading first emerged in the exchanges located in ________ Show Answer

Q21) Futures differs from forwards in the sense that __________ Show Answer

Q22) The beta of Nifty is ______ Show Answer

Q23) You have bought a portfolio of securities on the exchange. To eliminate the risk arising out of market, you should __________ Show Answer

Q24) Security futures do not represent ownership in a corporation and the holder is therefore not regarded as a shareholder. Show Answer

Q25) Santosh is bearish about ABC Ltd and sells ten one-month ABC Ltd. Futures contracts at Rs 2, 96,000. On the last Thursday of the month, ABC Ltd. Closes at Rs.310. he makes a ______ Show Answer

Q26) Suppose we have a portfolio of Rs.500000 which a beta of 0.8. we sold index future of Rs.360000 for hedging. This type of hedge called Show Answer

Q27) The purchase of a share in one market and the simultaneous sale in a different market to benefit from price differentials is known as ____________. Show Answer

Q28) Selling short a stock means ___________. Show Answer

Q29) If price of a futures contract decreases, the margin account of the buyer of this futures contract is debited for the loss. Show Answer

Q30) Is it true that an efficient cash market is required for an efficient future markets? Show Answer

Q31) The ask price is the price at which _______. Show Answer

Q32) A future contract is usually referred to by its delivery month. Show Answer

Q33) Contract month means ______ Show Answer

Q34) The gain or loss is realized on daily basis due to mark to market mechanism in which of the following contract? Show Answer

Q35) Futures trading is considered more risky than equity trading due to _______. Show Answer

Q36) You have bought a futures contact & the price drops, you will _______. Show Answer

Q37) A future contract is a very standardized contract that leaves very little (except the price) open to negotiation. Show Answer

Q38) The Ask price is always ______. Show Answer

Q39) The idea & economic rational of introducing Forward contract is to _____. Show Answer

Q40) Which of the following problem(s) that exists in Forward contracts are solved by the Futures contracts? Show Answer

Q41) The contract size in futures market is defined by ______. Show Answer

Q42) A unique principal of futures trading makes trading possible for those who do not want to make or take the delivery of underlying asset. Which is that principal? Show Answer

Q43) Futures differs from forwards in the sense that _____. Show Answer

Q44) If an investor buys a future contract but does not sell it till expiry than what happens to the contract? Show Answer

Q45) Client KKK has purchased 10 contracts of December series & sold 7 contracts of January series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open position? Show Answer

Q46) _____ means the total number of equity futures contracts that have not been offset & closed by an opposite position. Show Answer

Q47) You sold one ZEE Ent Ltd. Futures contract at Rs. 260 & the lot size is 1000. What is your profit or loss, if you purchase the contract back at Rs. 251? Show Answer

Q48) The settlement in futures contract happens only in _____. Show Answer

Q49) The beta of SBI is 1.4. a trader has a long position in SBI of Rs. 400000 & a short position in Nifty of Rs. 410000. Which of the following is true? Show Answer

Q50) The index futures position are mark to marketed on a daily basis. Show Answer

Q51) The daily settlement of open futures contract is called – Show Answer

Q52) Who is responsible for paying the margins in case of futures contract? Show Answer

Q53) Currency futures were first traded at _______. Show Answer

Q54) Limitations of forward market is/are _______. Show Answer

Q55) Mr. Ganesh thinks that the market will go down, so he sells 10 lots of index futures at 3500. His prediction comes true & the index falls & Mr. Ganesh buys back the futures contract at 3410. What is the profit Mr. Ganesh has made if one lot of index is of 50? Show Answer

Q56) Mr. shetty purchased a futures contract of SBI at Rs. 2000 on 10th September. That day the spot price was 1985. On the expiry day, SBI closes at Rs.2033. what will be the approximate spot price? Show Answer

Q57) A trader believes that the future price of PQR Company will rise & being a smart trader he will _______. Show Answer

Q58) Nifty futures is trading at 4850. An investor buys a 4900 current month call at 100. What should be the closing price of Nifty above which the investor starts to make profits? Show Answer

Q59) The daily settlement of a open position in futures contract is called – Show Answer

Q60) Mr. Sunil wishes to buy a futures contract of Tata Steel shares. He should _______. Show Answer

Q61) You own a portfolio of various stocks for long term but currently you are unsure of market. The best possible action to safeguard your investment Is-- Show Answer

Q62) Forward contracts are those contracts which can be customized as per the requirements of the concerned parties. Show Answer

Q63) Which statement is false with respect to Futures market? Show Answer

Q64) A trade who buys the futures contracts takes position Show Answer

Q65) A trade who sell future contract takes _________ position Show Answer

Q66) Price is the price at which an asset trades in the cash market Show Answer

Q67) _________ price is the price of the futures contract in the future market Show Answer

Q68) Global indices are traded n NSE & BSE Show Answer

Q69) Cost of curry is same for all participants Show Answer

Q70) The amount one need to deposits in the margin account at the time entering a futures contract is known as the initial margin Show Answer

Q71) If contract value is 620000 and broker changes 10% as initial margin calculate initial margin Show Answer

Q72) Initial margin is same for all the assets Show Answer

Q73) MTM margin collected from _________ making client Show Answer

Q74) _________ is the total number of contracts outstanding for an underlying asset Show Answer

Q75) Future contract have advantages and no limitations Show Answer

Q76) Which of the following is not a limitation of the futures contract? Show Answer

Q77) A long futures position makes loss when price _________ Show Answer

Q78) A short futures position makes profit when price__________ Show Answer

Q79) A short futures position makes loss when price__________ Show Answer

Q80) Which of the following entities use derivative product to head their portfolio? Show Answer

Q81) Arbitrage is a deal that product produces _________ profits Show Answer

Q82) Traders take _________ positions in futures market Show Answer

Q83) Which of the following is not a transaction cost? Show Answer

Q84) Market risk is also known as _________ risk Show Answer

Q85) _________ risk is also known as specific risk Show Answer

Q86) Information of beta is not available in market at all Show Answer

Q87) Long hedge is the transaction when we hedge our position in cash market by going _________ in futures market Show Answer

Q88) Traders take _________ position when they expect market to go up Show Answer

Q89) Traders take _________ position when they expect market to go up Show Answer

Q90) On expiry, the Forward contracts are settled by ________. Show Answer

Q91) In futures trading, the profits are received & the losses are paid ______. Show Answer

Q92) The payoff for a person who sells a future contract is similar to the payoff of a person who ________ an asset. Show Answer

Q93) A trader sells 1 ABC share future contract at Rs.542 & buys back the same at Rs.491. what is his profit/ loss? Market lot is 500 shares. Show Answer

Q94) What will be the payoff if a stock future was bought at Rs. 100 & sold at Rs.87? The lot size is 1000 shares. Show Answer

Q95) The parties for the futures contract have the flexibility of closing out the contract prior to the maturity by squaring off the transactions in the market. Show Answer

Q96) To do arbitrage between overpriced futures, we will have to _______. Show Answer

Q97) Generally the future prices coverage to spot prices on expiry day. Show Answer

Q98) The Indian stock futures market deals in _____. Show Answer

Q99) What role do speculators play in the futures market? Show Answer

Q100) You are bullish on a stock but unsure of the overall market. The action you should take is – Show Answer

Q101) The future contracts are custom designed & hence each contract is different as per the terms of contracting parties. Show Answer

Q102) The difference between the spot price & the future price is called Tick. Show Answer

Q103) Contract month is the month in which futures contract ________. Show Answer

Q104) You have a short position in LPQ stock futures at Rs.350( one lot size is 500s hares) & you have made a profit of Rs.28000. to do this you will have to : Show Answer

Q105) In case of futures, the initial margin is paid only by the sellers. Show Answer

Q106) When trading in futures contract, the terms of the contracts are decided mutually by the trading parties. Show Answer

Q107) A long position in a January futures contract can be reversed by a short position in that stock future of February month. Show Answer

Q108) The minimum price movement in scrip is called BASIS. Show Answer

Q109) In India, the futures contracts are available for _______. Show Answer

Q110) The future price is ______ Show Answer

Q111) You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs.3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.) Show Answer

Q112) If you have sold a XYZ futures contract (contract multiplier 50) at 3100 and bought it back at 3300, what is your gain/loss? Show Answer

Q113) What role do speculator plays in the future market? Show Answer

Q114) The spot price of TISCO is Rs. 2050 and the cost of financing is 10%.What is the fair price of a one month futures contract on TISCO Show Answer

Q115) The beta of ICICI Bank is 1.5. A person has a long position of Rs. 400,000 of ICICI Bank. Which of the following gives a complete hedge? Show Answer

Q116) On 15th January, Raju bought a January Nifty futures contract which cost him Rs.334, 500. For this he had to pay initial margin of Rs.31,520 to his broker. Each Nifty futures contract is for delivery of 100 Nifties. On 25th January, the index closed at 3360.How much profit/loss did he make? Show Answer

Q117) The spot price of ABC Ltd. Is Rs. 2000 and the cost of financing is 10%.whatis the fair of a one month futures contract on ABC Ltd.? Show Answer

Q118) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+) or loss (-), if you purchase the contract back at Rs.250? Show Answer

Q119) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+) or loss (-), if you purchase the contract back at Rs.254? Show Answer

Q120) You sold one XYZ future contracts Rs.278 and the lot size is 1200.what is your profit (+) or loss (-), if you purchase the contract back at Rs.254? Show Answer

Q121) If you sell a put option on a share with strike price of Rs.245, market price of Rs. 260 and a premium of rs.42, how much is the maximum gain that you may have on expiry of this position? Show Answer

Q122) You sold one XYZ future contracts Rs.248 and the lot size is 1200.what is your profit (+) or loss (-), if you purchase the contract back at Rs.273? Show Answer

Q123) More than 99% of future transactions are offset ______ Show Answer

Q124) A future contract represents a _______ to transact at some point In the future Show Answer

Q125) Open interest figure is good indicator for the ________ in every contract Show Answer

Q126) You are the owner of a 2 million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 15%. Spot Nifty stands at 2200. Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want? Show Answer

Q127) You sold one XYZ Stock Futures contract at Rs. 278 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265? Show Answer

Q128) You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs. 3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.) Show Answer

Q129) If you have sold a XYZ futures contract (contract multiplier 50) at 3100 and bought it back at 3300, what is your gain/loss? Show Answer

Q130) In an equity scheme, fund can hedge its equity exposure by selling stock index futures. Show Answer

Q131) Margins in 'Futures' trading are to be paid by _______. Show Answer

Q132) If an investor buys a call option with lower strike price and sells another call option with higher strike price, both on the same underlying share and same expiration date, the strategy is called ___________. Show Answer

Q133) In a forward contract, the party that agrees to sell the underlying asset on a certain specified date for a certain specified price is said to have assumed ________. Show Answer

Q134) A trader sold on ABC Stock Futures Contract at Rs.354 & the lot size is 900. What is your profit or loss if you purchase the contract back at Rs. 341? Show Answer

Q135) Mr. Mohan entered into a contract with Mr. Soham to buy 500 bags of cotton at a price of Rs.800 per bag. Delivery of goods & payment of money will take place 4 months from now. Both Mr. Mohan & Mr.Soham have a right as well as an obligation under this contract. What type of contract is this? Show Answer

Q136) If you have a long or short position in a futures contract, this can be closed by initiating a reverse trade. Show Answer

Q137) A trader has taken a short position of one contract in Sept ABC futures(contract multiplier 50) at a price of Rs.1800. when he closed this position after a few days, he realized that he has made a profit of Rs.5000. which of the following closing actions would have enabled him to generate the profit?(please ignore brokerage costs). Show Answer

Q138) Mr. Deshmukh took a short position of one contract in May Nifty futures (contract multiplier 50) at a price of Rs. 5600. When he closed this position after a few days, he realized that he has made a profit of Rs. 5000. Which of the following actions would have enabled him to generate his profit? Show Answer

Q139) Mr. Nayar has purchased 8 contracts of March series & sold 6 contracts of April series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open position? Show Answer

Q140) An investor is bearish about YES Bank & sells ten one-month YES Bank futures contract at Rs.303000. On the last Thursday of the month, YES Bank closes at Rs. 300. He makes a ______. (Assume one lot = 100) Show Answer

Q141) An investor owns 1000 shares of Reliance. Around budget time he gets uncomfortable with price movements. One contract of Reliance is equivalent to 100 shares. Which of the following will give him the hedge he desire? Show Answer

Q142) Which price is closest to the 3rd month future price of share if the spot price is Rs. 326 & the interest rate is 12% pa. Show Answer

Q143) If you have sold a ITC futures contract (contract multiplier 500) at 300 & bought it back at 328, what is your gain/loss? Show Answer

Q144) The payoff for a trader who sells a future contract is similar to the payoff for a trader who _____ an asset. Show Answer

Q145) To take a selling position in a stock futures contract, a trader should ______. Show Answer

Q146) What role does speculator play in the futures market? Show Answer

Q147) The beta of a stock is 0.7 & you have a buy position of Rs. 300000 in it. Which of the below options will give you a complete hedge? Show Answer

Q148) A portfolio of Rs. 25 Lac has a beta of 1.20. A complete hedge is obtained by ______. Show Answer

Q149) Mr. Dev bought a April Nifty future contract on 10th April which cost him Rs. 562000. The initial margin he has to pay was Rs.55400. On 23rd April he sold the Nifty future at 5710. How much profit or loss did he make? (Nifty lot 100) Show Answer

Q150) Cost of carry model means price of futures is equal to ______. Show Answer

Q151) Forward contract are bilateral contract Show Answer

Q152) Which of the following terms in forward contract can be negotiated? Show Answer

Q153) Forward contracts are not listed Show Answer

Q154) Forward contracts have liquidity risk Show Answer

Q155) _________ risk is a that counterparty will fail to fulfill its contractual obligations Show Answer

Q156) Counterparty risk is also called as _________ Show Answer

Q157) Futures market was innovated to overcome the limitations of _________ Show Answer

Q158) Maximum number of index futures contracts is .month contract cycle Show Answer

Q159) Every future contract expires on last _________ of respective month Show Answer

Q160) If last Thursday of month is a trading holiday future contracts will expire on _________ trading day Show Answer

Q161) Currently all equity derivatives contracts are settled Show Answer

Q162) The minimum move allowed in the price quotations of the contract is called as _________ Show Answer

Q163) The difference between the spot price and futures price is called_________ Show Answer

Q164) Basis for 1 month contract would be _________form the basis for two or three month contract Show Answer

Q165) Financial settlement of futures contract takes place at the _________ price of the underlying asset Show Answer

Q166) MICEX is a _______ index Show Answer

Q167) Mr. X buys 1 nifty contract at Rs 6100. Where lot size is 50 if nifty futures close at Rs 6050 calculated MTM margin payable by Mr. X Show Answer

Q168) Mr. ABC buy 2 nifty contract at Rs 5450 where lot size is 50 if nifty futures closes at Rs 5600 calculate MTM margin Show Answer

Q169) The open interest =__________ Show Answer

Q170) Outstanding / unsettled buy position in a contract is called _________ position Show Answer

Q171) Outstanding / Unsettled sell position in a contract is called _________ position Show Answer

Q172) In case of futures contract long position has _________ profit potential Show Answer

Q173) In case of futures contract short position has _________ profit potential Show Answer

Q174) Which of the following is not an assumption in cash and carry model? Show Answer

Q175) Cash and carry model is suitable for pricing Show Answer

Q176) According to expectancy model of future pricing future cannot trade at a discount Show Answer

Q177) Unsystematic risk normally affects _________ companies Show Answer

Q178) Total price risk in investment in securities =__________. Show Answer

Q179) _________ is a measure of systematic risk Show Answer

Q180) Systematic risk _________ be avoided by diversification Show Answer

Q181) Unsystematic risk _________ be avoided by diversification Show Answer

Q182) Every portfolio is exposed to _________ risk Show Answer

Q183) Stock / portfolios having beta more than 1 are called _________ stock / portfolios Show Answer

Q184) Futures provide _________ expensive mode of altering portfolio Show Answer

Q185) Mr. Suraj buys stock futures 1000 shares at Rs. 260 & sells 800 the same day at Rs. 263. The settlement price for the day was Rs.256. what will be his MTM profit/ loss? Show Answer

Q186) Mr. P is long in 4 NIFTY contracts at Rs.5945. NIFTY futures closes at 5905. What is the Mark to Market for Mr. p? (Nifty contract is of 50) Show Answer

Q187) Arbitrage activities would ensure that the prices of futures contract are aligned with the prices of the underlying assets. Show Answer

Q188) A calendar spread contract in index futures attracts higher margin than some of two independent legs of futures contract. Show Answer

Q189) In futures market, basis is refferd to as _______. Show Answer

Q190) You are interested in clearing a perfect hedge for your portfolio. For this you need to sell the index futures & the index futures sold should be equal to the _________. Show Answer

Q191) You are interested in clearing a perfect hedge for your portfolio. For this you need to sell the index futures & the index futures sold should be equal to the _________. Show Answer

Q192) A client G1 has bought 1 contract of ABC futures May series at Rs.3240. the closing price of this share when the market closed on last Thursday of May was Rs. 3188. What is his profit or loss?( market lot is 100) Show Answer

Q193) If you have a short position in futures contract, you can square up it by_______. Show Answer

Q194) A calendar spread will attract _____ margin. Show Answer

Q195) In futures contract, the clearing house/ clearing corporation practically becomes the counter party for all transactions. Show Answer

Q196) A trader buys a June XYZ stock futures contract at Rs.242. after a few days the price of XYZ futures was Rs.269. what will be your profit/loss if you square up your position? (The market lot of XYZ is 1000 shares) Show Answer

Q197) If the tick size of scrip is 5 paisa & the spot price of that scrip is Rs.70, what will be the next upward tick? Show Answer

Q198) A risky trader/speculator believes that the future price of ABC company will fall & being a smart trader he will _______. Show Answer

Q199) If price of a futures contract increases, the margin account of the seller of this futures contract is debited for the loss. Show Answer

Q200) Mr.Shah purchased 2 futures contract of Ambuja Cements Ltd at Rs.180 (lot size 2000 shares). What will be his profit/loss if he sells them at Rs.187? Show Answer

Q201) Which of the following is closest to the forward price of a share, if cash price= Rs.750, Forward contract Maturity + 6 months from date, Market Interest rate = 12%? Show Answer

Q202) A calendar spread contract in index futures attracts ________? Show Answer

Q203) Client A has purchased 10 contracts od December series and sold 7 contracts of January series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open positions? Show Answer

Q204) Cost of carry model states that ___________ Show Answer

Q205) You are the owner of a million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty stands at 4000.Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want? Show Answer

Q206) On 15th January, Raju bought a January Nifty futures contract which cost him Rs.334, 500.For this he had to pay initial margin of Rs.31, 520 to his broker. Each Nifty futures contract is for delivery of 100 Nifties. On 25th January, the index closed at 3360.How much profit/loss did he make? Show Answer

Q207) You are the owner of a million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty stands at 4000.Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want? Show Answer

Q208) On 15th January, Raju bought a January Nifty futures contract which cost him Rs.334, 500.For this he had to pay initial margin of Rs.31, 520 to his broker. Each Nifty futures contract is for delivery of 100 Nifties. On 25th January, the index closed at 3360.How much profit/loss did he make? Show Answer

Q209) The spot price of ABC Ltd. Is Rs. 2000 and the cost of financing is 10%.whatis the fair of a one month futures contract on ABC Ltd.? Show Answer

Q210) On 15th October, Arvind bought a December Nifty futures contract which cost him Rs. 325,600. For this he had to pay an initial margin of Rs. 30,100 to his broker. Each Nifty futures contract is for delivery of 100 Nifties. On 27thDecember, the index closed at 3280.How much profit/loss did he make? Show Answer

Q211) 50June futures contract on WIPRO closed at Rs.1153 on May 20 and at Rs.1150 on May 21, 2002. Raju has a short position of 4000 in the June futures contract. On May 21,2002,he sells 3000 units of 10-June-2002 expiring Put Options on WIPRO at strike price of Rs.1145 for a premium of Rs.28 per unit. What is his net obligation to/from the clearing corporation for May 21,2002? Show Answer

Q212) On 15th October, Arvind bought a December Nifty futures contract which cost him Rs. 325,600. For this he had to pay an initial margin of Rs. 30,100 to his broker. Each Nifty futures contract is for delivery of 100 Nifties. On 27thDecember, the index closed at 3280.How much profit/loss did he make? Show Answer

Q213) Forwards contracts are ______ contracts and hence exposed to counter party risk Show Answer

Q214) On the expiration date, the forward contract has to be settled by _________ Show Answer

Q215) Hedging with index futures means _________ Show Answer

Q216) In case a Future Contract is not traded in a day, which of the following prices is reckoned for daily mark to market settlement? Show Answer

Q217) If price of a futures contract decreases, the margin account of the buyer of this futures contract is debited for the loss. Show Answer

Q218) June futures contract on WIPRO closed at Rs. 1153 on May 20 and at Rs.1150 on May 21, 2012. Raju has a short position of 4000 in the June futures contract. On may21, 2002, he sells 3000 units of 10-june-2002 expiring put options on WIPRO at strike price of Rs.1145 for a premium of Rs.28 per unit. What is his net obligation to / from the clearing corporation for May 21, 2002 ? Show Answer

Q219) Which of the following is closest to the forward price of a share, if Cash Price = Rs.750, Forward Contract Maturity = 6 months from date, Market Interest rate = 12%? Show Answer

Q220) A calendar spread contract in index futures attracts ___________. Show Answer

Q221) Client A has purchased 10 contracts of December series and sold 7 contracts of January series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open positions? Show Answer

Q222) When the near leg of the calendar spread transaction on index futures expires, the farther leg becomes a regular open position. Show Answer

Q223) What role do speculators play in the futures market? Show Answer

Q224) Mr. X purchases 100 put option on stock S at Rs 30 per call with strike price of Rs 280. If on exercise date, stock price is Rs 350, ignoring transaction cost, Mr. X will choose _____________. Show Answer

Q225) In a Indexed Futures Contract, the tick size is 0.2 of a index point & index multiple is Rs.50, then a tick is valued at ______. Show Answer

Q226) The securities which are placed by clearing members with the clearing corporation as a part of liquid asset are ______. Show Answer

Q227) When would a trader make a profit on a short position of September futures? Show Answer

Q228) The process by which a future contract is terminated by a transaction that is equal & opposite to the original transaction is called ______. Show Answer

Q229) Which of the following is closest to the forward price of a share, if cash price is Rs.425, forward contract maturity=12 Months from date. Market interest rate 12%. Show Answer

Q230) A trader is very bearish on specific companies. However he is bullish on the market as a whole. Which of the following is the most appropriate strategy to take advantage from this view? Show Answer

Q231) A calendar spread in index futures is treated as ______ in far month contract when the near month contract is expired. Show Answer

Q232) The beta of SBI is 0.9. If a trader has buy position of Rs.3,00,000 of SBI, which of the following will give him a complete hedge? Show Answer

Q233) An investor has bought 100 SBI shares at Rs. 2000. How will he hedge it? The current market price of SBI is Rs.2000. Show Answer

Q234) If a trader does a calendar spread in index futures & the near leg of the calendar spread expires, the further leg becomes a regular open position. Show Answer

Q235) A trader has bought 100 shares of XYZ Ltd. at Rs.780 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to loose more than Rs. 1000 on his long position in XYZ. What should the trader do? Show Answer

Q236) If you are an exporter what would you do to safeguard against dollar rate fluctuations? Show Answer

Q237) If one makes does a calendar spread contract in index futures, then it attracts ______. Show Answer

Q238) You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs.3400. when you closed this position after a few days; you realized that you have made a profit of Rs. 10000. Which of the following actions would have enabled you to generate this profit? (You may ignore brokerage cost) Show Answer

Q239) The spot price i.e. the market price of a share is Rs.200 & the interest rate is 12%. Which of the below price is closest to 3 month futures maturity? Show Answer

Q240) The market wide position limit for single stock futures & stock options contract shall be linked to the free float market capitalization & shall be equal to _____ of the number of shares held by non-promoters in the relevant underlying securities. Show Answer

Q241) What is the difference between spot price & future price known as? Show Answer

Q242) The Indian Derivatives market has 6 underlying futures contracts available at a given time. Show Answer

Q243) You are long in ICICI Bank future at price Rs.1000. the prices rises to Rs.1020 next day. The mark to market margin will be credited to your account. Show Answer

Q244) In futures market exchange decides all the contract terms other than__________. Show Answer

Q245) Which of the following is not a feature of futures contract? Show Answer

Q246) If spot price of a futures contract is greater than futures price, basis for the asset is__________ Show Answer

Q247) If futures price of a futures contract is greater than spot price basis for the asses is _________ Show Answer

Q248) On the maturity of futures contract basis turns to __________ Show Answer

Q249) _________ is a relationship between futures price and spot prices Show Answer

Q250) ________ on a position is the likely profit / loss that would accrue to a market participant Show Answer

Q251) Cash and carry model of future pricing is also known as __________. Show Answer

Q252) Cash and carry model assume that in an efficient market arbitrage opportunities _________. Show Answer

Q253) Fair price f assets in cash and carry model can be calculated as, __________ Show Answer

Q254) Which module of future pricing argues that futures price is the expected spot price of an asset in the future? Show Answer

Q255) Stock / portfolios having beta less than 1 are called _________ stock / portfolios Show Answer

Q256) Arbitrage in the futures market are of ________ types. Show Answer

Q257) Which of the following is not a type of arbitrage in futures market? Show Answer

Q258) If stock ABC is trading at Rs 101 at NSE and Rs 103 at BSE does arbitrage opportunity exist? Show Answer

Q259) Arbitrage opportunity arising due to price difference in two different exchanges is known as _________ Show Answer

Q260) Time spread is also known as vertical spread. Show Answer

Q261) The relationship between _____ & _____ is represented by Cost of Carry. Show Answer

Q262) An investor takes short position in Nifty by selling 10 lots at 5500. When he squares up the position he finds that he has made a profit of Rs.25000. the lot size of Nifty is 50. Which of the following action helped the investor this profit? Show Answer

Q263) Of the below options, when will the April index future contract be introduced on NSE? Show Answer

Q264) In the index futures, if the near leg of the calendar spread transaction expires then the farther leg becomes a regular open position. Show Answer

Q265) As the expiry/ maturity of a future contract approaches, the spot price & future price tend to become same. This is known as ______. Show Answer

Q266) If futures prices are lower than spot price of an asset, market participants may expect the spot price to come down in future. This situation is called _______. Show Answer

Q267) Ms. Patil sold 4 futures contract of Bata India Ltd. At Rs.820 (lot size 250 shares). What is her profit/loss if she purchases back the contract at Rs.806? Show Answer

Q268) A trader Mr. Raj wants to sell 10 contracts of June series at Rs.5200 & a trader Mr. Rahul wants to buy 5 contracts of July series at Rs.5250. lot size is 50 for both these contracts. The initial margin is fixed at 10%. They both have their accounts with the same brokers. How much initial margin is required to be collected from both these investors by the broker? Show Answer

Q269) Calendar spread carry only ______ risk. Show Answer

Q270) . Mr. A buys a August futures contract of ICICI bank at Rs.900. on the last Thursday of the month i.e. Expiry, the last traded price in August futures is Rs.912 & the closing price in cash/spot market is Rs.910. what is the profit/loss of Mr. A if his position is sq-up by the exchange. Market lot of ICICI bank is 250. Show Answer

Q271) An investor Mr. Shah wants to buy 8 contracts of January series at Rs.740 & an investor. Mr. Patel wants to sell 5 contracts of February series at rs.754. Initial margin is fixed at 6%. How much initial margin has to be collected from them? Market lot is 250. Show Answer

Q272) A wheat exporter has entered into a contract to supply wheat after 2months. He will be buying that wheat soon. But he is afraid that a sudden rise in wheat prices may erode his profits. What should he do? Show Answer