Question Bank(Sem 5)

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Derivatives MarketDefine Derivatives. What are the types of Derivatives? What are the types of Generic Derivatives?1)

2) a. Differentiate between Forward Contracts and Future Contracts b. Differentiate between different participants in the market.

3)

Explain the following terms:

Contract Size, Contract Multiplier, Tick Size, Open Interest, Volume, Initial Margin, Mark to Market Margin, SPAN.

4) What are the effects of the following on the Call and Put Options : a. Cash Price of the asset b. Strike Price c. Volatility of the underlying Price. d. Time to Expiration e. Interest Rate.

5) a. What is Hedging? Explain different types of Hedging used in the Market. b. Write a Note on Arbitrage. Explain different types of Arbitrage.

a) What is Options? What are the types of Options? Explain with the help of Pay off charts for6)

all positions possible in the market.

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Question Bank(Sem 5)b) Draw comparisons between Futures and Options.

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7) What do you mean by Synthetic Positions? What is the purpose of creating Synthetic Positions? Explain with the help of Examples.

8) a. Explain Positions.

the

process

of

creating

Synthetic

Short

Put

b. Explain the process of creating Synthetic Long Call Positons.

9) A trader goes long on 5 lots of Tata Steel CA with strike price of Rs.500/- @ Rs. 5/-. The CMP of Tata Steel is Rs.495. One Lot size of Tata Steel is 1000. What are the different payoff of the trader at the following levels of the share: a. 480 b. 495 c. 500 d. 520 e. 540 10) A trader has a position of 1000 shares of Reliance. The trader is of the opinion that due to the market conditions there is a temporary down fall in the share price but in the long term the price will go up. The trader wants to hedge is position for the downfall expected in the portfolio value. He expects the share price to go upto Rs.950. CMP of the share is Rs.1020. Guide him what should he do.

11) Give a detailed analysis of Vertical Bullish Spreads with the help of an example using puts.

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Question Bank(Sem 5)

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12) You expect a very substantial move in the market. The direction of which is unknown to you. How do you trade explain with the help of an example. If you have an view in the market about a direction what changes will you make in the trades.

13)

Solve the following: Call premium 3 months 6 months 3 4 1 1.25 6 6.30 Put premium 3 6 months months 0.35 1.05 5.50 6.00 0.45 0.65

Shar e A B C

Current price 52 40 35

Strike price 50 45 30

1. If you purchase one 3 month call contract on A, what profit or loss will you make on maturity if the price of A at that time is Rs. 57/2. If Bs price is Rs. 35 on maturity of the 6 month option, determine the value of five 6 month put contracts at their maturity date 3. If you had purchased five 3-month call options of C and the price of C is Rs. 32 on maturity, determine your profit or loss on the investment 4. If you had purchased five 3-month puts on C, what would be your profit or loss on maturity if the share price was Rs.32/5. If your client wrote five 6-month call options on Bs share, what is his profit or loss on maturity if price of B at that time is Rs. 43/6. If your client wrote five 6-month put options on B, what would his profit or loss be on maturity if share price then was Rs. 43/14) a. Explain the concepts of Protected Put

b. What is a Covered Call

15) a. What is Protected Call? Explain b. What is a Reverse Collar?

16)

What is Covered Put? Explain Collar.

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Question Bank(Sem 5)

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17) Explain the strategy of Condor. What is the difference between Condor and Butterfly.

18)

Explain the strategy of Strip and Strap in detail.

19)

Explain the Option Greeks a. Delta b. Gamma c. Vega d. Lambda

Chintan is on the view that Bajaj Auto has a given a position break out at current market price of Rs.2010/- but he also believes that the price shall only go upto 2040. Not beyond that which option. Spread can he use, and prepare a table to show pay off at price levels of 1980, 2010, 2040, 2070, 2010.20)

1 month 2010 call 15 1 month 2050 call 5 1 month 1980 call 35

1 month

Explain the basis and concept of future pricing with the help of an example. Calculate future prices from the following?21)

Spot Price= 5,410 Time for expiration= 30 days Interest rate = 12% p.a 22) Explain the exercise and Assignment Process. Also show the exercise settlement computation. 23) Explain the comprehensive Risk management Mechanisms adopted by NSCCL.

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Question Bank(Sem 5)24) What are the different types of margins 25) Expalin the accounting process of futures 26) Expalin the accounting procees of options

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Foreign Exchange Markets1) Important terms and concepts a) Direct quotes b) Indirect quotes c) American quotes d) European quotes e) Bid/offer rate f) Ask/sell rate g) Vehicle currency h) Spot transaction i) Forward transactions j) Cross rates k) Correspondent banks l) Non-deliverable forward

2) Difference between direct and indirect rates? 3) What are nostro, vostro and loro accounts?

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Question Bank(Sem 5)4) What

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is triangular arbitrage? Explain with the help of an

example? 5) Explain in brief gold exchange standards?6) Explain Bretton woods system?

7) What is triffine paradox?8) Explain in brief Smithsonian agreement 9) What is fixed exchange rate system? Give the case for and

against fixed exchange rate system 10) What is floating exchange rate system ?give the case for and

against floating exchange rate system 11) 12) 13) 14) 15) 16) 17) What is crawling peg and adjustable peg system What is the exchange rate mechanism in India Short note -CHIPS Short note -CHAPS Short note risk element in foreign exchange markets Need and importance of foreign exchange management What are the various methods adopted for foreign exchange

management 18) What is the impact of LPG on Indias foreign exchange market

and inbound and outbound investment 19) What is the role of RBI in directing and controlling forex

market in India

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Question Bank(Sem 5)20)

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What is capital account convertibility? What are its pros and

cons 21) What are the learning from Asian financial crisis with reference

to capital account convertibility22)

What is the impact of Indian MNCs on foreign exchange? What is the FEMS in the Indian forex market? What are Eurocurrency markets and factors which led to their

23) 24)

growth? 25) 26) Special features of the euro currency markets What is LIBOR?

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Question Bank(Sem 5)

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Regulation of Securities Markets1. Define regulation. What are the benefits of a regulated / controlled market? 2. What is the need for regulating financial markets in India? 3. Explain insider trading with the help of an example? 4. Discuss briefly the nature of savings and investments in India? 5. Define the terms Savings and Investments. Explain the features of Investments. 6. What is meant by "investor profile". Explain the factors determining the profile of an investor? 7. Explain with reasons whether the profile of Indian investor changing? 8. What is an investment plan? Discuss the factors determining investment decisions of an Indian investor? 9. Why is there a need to provide protection to the retail investor? 10. What are 'Vanishing Companies'? Discuss about the "vanishing companies of Ninetees". 11. What is an IPO? Discuss the various economic offences occurred through IPO Scams? 12. Discuss the various entities governing the securities market in

India?

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Question Bank(Sem 5)13. 1956. 14. 15. 16. 17. 18. 19. a) b) c) d) e) f) g)

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Explain briefly the Securities Contract (Regulation) Act of What are the special regulatory requirements for Derivative Critically evaluate the functions of the 'Department of

Markets? Company Affairs'. Describe the role of the 'Department of Economic Affairs What are the functions of RBI? Is there a need for Self-Regulation in Financial Markets? Why? Write Short Notes On: Growth of Indian Securities Markets Financial Planning and Forecasting SEBI Act, 1992 Depositories Act, 1996 Insurance Acts in India Forward Market Commission (FMC) Insurance Regulatory and Development Authority (IRDA) (India)'.

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Global Capital Markets1 2. 3. 4. 5. 6. 7. 8. What are the major markets of the world and their characteristic? Name some of the emerging stock markets of the world? What is multiple listing and its advantages and disadvantages? What are depositary receipts? What are ADRs? What are GDRs? What are the parties involved in ADR/ GDR? What the different types of ADRs?

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Question Bank(Sem 5)9. 1 0. 1 1. 1 2. 1 3. 1 4. 1 5. 1 6. 1 7. 1 8. 1 9. 2 0. 2 1. 2 2. 2 3.

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Give brief history and explain about global financial markets. What is the role of media and technology in the global financial markets? What the benefits of Global Capital Markets? (Diversification). What are mergers and acquisitions? What is the need for Mergers and Acquisitions? What the advantages of Mergers and Acquisitions? What are domestic bonds? What are Euro bonds? What are the foreign bonds? What are the participants in global bond markets? What are the credit rating agencies and what is their role in capital markets? What are the global rating agencies in the world? Explain the advantages and disadvantages of CRAs? Explain the procedure for using Euro Bonds? Explain the obstacles to international investments?

Insurance Fund Management

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Question Bank(Sem 5)Q.1

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a. Define insurance and explain the benefits of insurance. 8M b. Briefly describe the characteristics of insurance. 7M

Q.2 Describe different types of insurance and discuss the risk covered by it. 15M Q.3 a. What are the different types of insurance organizations? Briefly discuss. 8M b. Write a shot note on types of insurance organizations existing in India. 7M Q.4 Explain in detail the principles of insurance. 15M

Q.5 a. What are the different types of life insurance policies prevailing in market? 8M b. Discuss Unit Linked Insurance Policies in detail. 7M Q.6 a. Explain different types of annuities. 8M b. Distinguish between Annuity Contracts and Life insurance Contracts. 7M Q.7 a. Discuss the history and evolution of insurance industry in India. 8M b. When IRDA was formed? What is the role played by IRDA for insurance sector in India? 7M Q.8 Write a note on formation of Malhotra Committee and state its objectives and recommendations. 15M Q.9 Explain the following concepts briefly: 15M a. Days of grace b. Lapsation of policy c. Nomination d. Assignment e. Surrender Value

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Question Bank(Sem 5)

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Q.10 a. Distinguish between Nomination and Assignment of insurance policy. 8M b. What are the different options available to avoid forfeiture of policy? Explain briefly. 7M Q.11 a. Explain the concept of underwriting. Discuss the classification of physical hazards/ risks from underwriting perspective. 7M b. Write short notes on: 8M I. Financial underwriting II. Medical underwriting Q.12 a. What are the physical factors impacting the risk related to life of policy holder? 8M b. Explain different sources of risk related information. 7M Q.13 a. What is the meaning of mortality risk? Explain the relevance of mortality rate for life insurance. 7M b. Explain the various sources of investment funds for insurance company. 8M Q.14 a. Discuss the principles of investment in detail. 8M b. Provide the details of exposure norms prescribed by IRDA for investments of insurance company. 7M Q.15 a. Briefly describe the process of valuation of insurance policies. 8M b. What are the several options of granting bonus to insurance policies? 7M12

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Q.16 a. Define risk and explain classification of risk. 7M b. Briefly explain the process of risk management process and tools for controlling risks. 8M Q.17 a. What are the different investment instruments where funds can be invested by insurance companies? 8M b. Distinguish between mutual fund schemes and unit linked insurance plans. 7M Q.18 Describe the various marketing techniques adopted by insurance companies for promotion of insurance products. 15M Q.19 a. Define premium and discuss the concept of risk premium, net premium and level premiums. 7M b. Compute premium in following cases: I. 4M Tabular premium: Rs.55

No rebate for mode of payment Rebate for sum assured above Rs. 50000: Rs.2 per thousand Double Accident Benefit rider cost: Rs.1.50 per thousand Loading due to occupation: Rs. 2.50 per thousand Calculate half yearly premium for Sum Assured of Rs.150000.

II.

Tabular premium: Rs.33.10 4M Sum Assured: Rs.100000 Rebate for yearly payment of premium: Rs.2 per thousand.

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Question Bank(Sem 5)

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Rebate for half yearly payment of premium: Rs.1 per thousand. Double Accident Benefit rider: Rs.1 per thousand Occupation loading: Rs. 4 per thousand. Calculate premium for yearly payment. Q.20 a. What is the role of an actuary in the insurance sector? 8M b. Write a short note on Ombudsman. 7M Q.21 Write a detailed note on procedure for setting up of an insurance company. 15M Q.22 a. What are the subject matters covered by marine insurance? 8M b. Briefly explain different types of fire insurance policies. 7M Q.23 a. Write a short note on Re-insurance 7M b. What is health insurance? Discuss various types of health insurance policies. 8M Q.24 a. Define risk and distinguish between risk and uncertainty. 8M b. What is surplus and what are various sources of surplus? 7M Q.25 a. Explain the classification of investment funds of the life insurance company 8M b. State the investment pattern prescribed by IRDA for different classes of investment funds of life insurance company 7M.

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Question Bank(Sem 5)

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Portfolio ManagementChapter 1 1. What is Investment? Explain the objectives of Investment? 2. Define Investment? Explain difference between Gambling, Speculation & Genuine Investment. 3. What is Portfolio Management? Explain its objectives. 4. Evaluate Equity as an Investment? 5. Explain various Tax Saving Schemes. 6. What are Mutual Funds? Explain its various schemes with example. 7. Explain the need for designing an Investment Portfolio. 8. Relevance of Portfolio Management in different sectors of Financial Markets. 9. Short Notes: a. Real Estate b. Insurance Investment c. Government Securities d. Bank Deposits Chapter 2

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Question Bank(Sem 5)

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1. Explain the difference between Traditional & Modern Theory of Portfolio. 2. Explain Modern Theory/Markowitz Theory. 3. What is Capital Assets Pricing Model (CAPM)? Explain its importance. 4. Explain different types of Risks in Investment. 5. Short Notes: a. Security Market Line b. Arbitrage Pricing Theory c. Capital Market Line d. Optimal Portfolio

6. Problems: a. Expected Return b. Standard Deviation c. Beta Calculation d. Variance e. Holding Period Returnf. CAMP

Chapter 3 1. What is Efficient Market Hypothesis (EMH)? Explain its types. 2. Explain various factors affecting performance measures. 3. Compare Treynor, Sharpe & Jenson portfolio performance measure. 4. What is Portfolio Evaluation?

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Question Bank(Sem 5)5. Explain performance Evaluation Measures. 6. Problems: a. Treynor b. Sharpe c. Jenson

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Chapter 4 1. Explain various Portfolio Management Services (PMS) in India. 2. Explain the procedure for setting up of Portfolio Management Services (PMS). 3. Explain SEBI Norms for Portfolio Management Services (PMS). 4. Short Notes: a. Future prospects of Portfolio Management Services (PMS) b. Registration Procedure of Portfolio Managers

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