Bachelor of Management Studies (B.M.S.) SEM V 2018 19 Nov 2018-19 FINANCE COMMODITY DERIVATIVES MARKET Question Paper - Mumbai University | munotes

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Questions asked in this paper

Q2 Figures to right indicate full marks
Q1 (A) State weather the following statement are True or False.(Any 8) 8 marks
Q1 It is very difficult to take long or short position in the derivatives s compared to other assets
Q2 Forwards are over the counter instrument
Q3 Expiration day is the last trading day of the contract
Q4 The spot price is the future market price of the underlying asset ( Price of each security x contract )
Q5 Contract price
Q6 Payoff on a position is likely profit/ loss that would accrue to a market participant with change in the price of the underlying asset at expiry
Q7 Speculators take large, calculated risks as they trade based on anticipated future price
Q8 In options, execution of be done any time before the expiry of the agreed date
Q9 An option premium is the income received by an investor who holds the option contract
Q10 The strike price is specified in the option contract and does change over time
- B) Match the following (Any 7) No margin requirement a | Unlimited profit Settlement of forward contract Arbitrage Le | Cash or delivery Option holder | Directly proportional to spot price Deep in the money Short position 7
Q2 (A) Discuss the Participants in derivative market? 8 marks
Q2 (B) Distinguish between Forward & Future 7 marks
Q2 (C) Write note on different types of derivative traded in India. 8 marks
Q2 (D) Define Commodity Market. Explain its history & growth in India 7 marks
Q3 (A) Explain the following Terminologies: 8 marks
Q1 Initial Margin
Q2 Contract Size
Q3 Settlement Price
Q4 Option Premium
Q3 (B) What is imperfect hedge ? what are the reasons for imperfect hedge? 7 marks
Q3 (C) The spot price of gold is Rs 31,000/- the locker rent is Rs500 and the insurance charges are Rs 750. The interest rate on the borrowed funds is 14% p.a. compounded on monthly basis. What will be the fair value of futures after 3 months? (08)
Q3 (D) Naman shorts a call option of VST Ltd at an exercise price of Rs 1020 with a premium of Rs
Q50 Calculate the profit or loss for Naman if the spot price on expiry is as follows: Rs. 970, Rs. 980, for the same. (07)
Q4 (A) Explain what is meant by intrinsic value or moneyness of an option contract 7 marks
Q4 (B) Distinguish between Binomial Option Pricing Model & Black Scholes Option Pricing Model
Q4 (C) The spot price of copper is Rs 4,600 per kg, the store room rent is Rs6,000 paid semi annually. The interest rate on the borrowed funds is 12% p.a. compounded on monthly basis. What will be the fair value of futures after 3 months? (07)
Q4 (D)An investor takes position in the futures market through the following transactions
- a. Buys 6 contracts of Tata Steel Ltd at Rs 3125 with a lot size of 200 which expires at a final settlement price of Rs 3150
- b. Sells 7 contracts of Canara Bank at Rs 675 with a lot size of 100 which expires at 665 Determine the net profit or loss for the investor from both the positions draw payoff diagram for
Q5 (A) What are the types of Order?
- (B) What are objectives of NSCCL
Q5 Write short notes on any three of the following
Q1 Backwardation
Q3 Types of Underlying Assets. 15 marks
Q4 MCX
Q5 Cost of Carry Model