Bachelor of Management Studies (B.M.S.) SEM V 2022 2023 Dec 2023 S FINANCE COMMODITY DERIVATIVES MARKET Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 All questions are compulsory. ( Subject to internal Choice )
2. Q2 Figures to the right indicate full marks
3. Q3 Use of non-programmable calculator, is allowed and mobile phones are not allowed
4. Q4 Support your answers with diagrams illustrations, wherever
5. Q1 Choose the correct alternative ( Any 8 out of 10 ) 1 A contract between a buyer and a seller entered into today regarding a transaction to be fulfilled at a future point in time is called 8 marks
   • D) Future contract 2 Speculators who neither buy nor sell securities in the market but still trade on them are called 3 An option exercised at the time of maturity it is termed as 4 are mainly used for hedging risk 5 Elimination of riskless profit opportunities in the futures market is 6 An option allowing the owner to sell an asset at a future date is a 7 An option holder is said to take a position
   • A) Long B) medium C) short D) close 8 order is used to limit loss on a trade
   • A) Immediate or cancel Stop loss C) Daily D) Formal 9 clearing member is not a trading member 10 liquid securities, the VaR margins are based on the of the State whether True or False ( any 7 out of 10 ) (07) parties have specified obligation under derivative contract 2 are traded on OTC If the price of the underlying moves according to the speculators 4 options have index as underlying 5 are mostly primary market instruments 6 price is the price the buyer is willing to pay 7 calendar spread we buy options with different expiry at the same 8 Higher volatility in price of underlying asset will lead to higher option 9 Monte Carlo Method take a lot of computational power and hence longer tie to estimate results The National Securities Clearing Corporation Ltd. (NSCCL) assumes the counterparty risk of each member and guarantees financial settlement
6. Q2 Discuss the Participants in derivative market 8 marks
7. Q2 What is Commodity Market? Explain the reasons for investing in 7 marks
8. Q2 C between Forward & Futures 8 marks
9. Q2 D_ Write note on different types of derivatives traded in India 7 marks
10. Q3 Explain the following Terminologies: 8 marks
    • i. Tick Size
    • iv. Size
11. Q3 B_ Elaborate the concept of Convergence 7 marks
12. Q3 C spot price of gold is Rs 39,000. The locker rent is Rs 500 insurance charges are Rs 750. Interest rate on borrowed funds is 12% pa compounded on monthly basis. What will be the fair value of 3 8 marks
13. Q3 An investor takes the position in the fututres market through the 7 marks
    • i. Buys 10 contracts on Hindalco Ltd at Rs 5,500 with a lot size of 200 which expires at a final settlement price of Rs 5,800
    • ii. Sells Vedanta 7 contracts at Rs 855 with a lot size of 100 which expires at Rs 825 Determine the net profit or loss for the investor from both the positions. Also draw pay off diagrams for the respective positions
14. Q4 What are the factors affecting the option premium? 8 marks
15. Q4 What is Binomial option Pricing Model? What are its advantages and 7 marks
16. Q4 C IRCTC Futures trade on NSE as one, two- and three-month’s contracts. Money can be borrowed at 16% pa. What will be the price of one unit of new two months futures contract on IRCTC, if no dividends are expected during the two months period assuming spot price of the 8 marks
17. Q4 D buys a call option of Texas Ltd at an exercise price of Rs 600 with a premium of Rs 30. Calculate the profit or loss on the option position for Justin if the spot price on expiry is as follows:, Rs 580, Rs 590, Rs the payoff diagram for the same 7 marks
18. Q5 A out the major recommendations of Dr L. C. Gupta Committee to strengthen the regulatory framework of SEBI 8 marks
19. Q5 What are the different methods of calculating VaR? 7 marks
20. Q5 Write Short Notes (Any 3) Mark to Market Margin of Carry Model Types of Margin 15 marks

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