Investment Planning India Chapter 2

—- is Asia’s first & the Fastest Stock Exchange in world.

“— is the BSE index.

S&P BSE SENSEX is calculated using the—–methodology.

“—- is the NSE index.

“—includes dividend received while calculating returns.

Mr. Q wants to invest in KU Ltd. but invest through such instrument which provide voting rights to him in company. Which of the following he should select

KYU Ltd. announced to pay dividend to his shareholder one of the shareholders asked within how many days the dividend should be credited in his account?

“—- is financial contract that derives its value from the underlying asset such as stock bond interest rate.

— contracts between two parties allows them to buy or sell an underlying asset on a future date for a certain mutually agreed pre-decided price contract traded on exchange.

—-contract give the buyer the right to buy or sell a mutually agreed quantity of an underlying on or before a certain date at a pre-determined price.

BUY A CALL GIVES THE BUYER

SELL A CALL GIVES THE WRITER

BUY A PUT GIVES THE BUYER

SELL A PUT GIVES THE BUYER

—are a series of forward contracts created to manage interest rate volatility.

Which of the following derivative market is standardized?

Which of the following has high counterparty default risk?

The difference between spot price and future price is called—-

Which of the following require margin payment to enter into contract?

Long or short position in any contract that is not yet settled or closed is called—-

Mr Y wants to know how the futures price is determined:

Options in which case the buyer can exercise the right any time on or before the expiry date are—–

If the buyer of an option can exercises the right/option only on the expiry date such options are—

In India Index Options are— style

Time value of an option:

In the money means—

Out of money means—

At the money means:

If an investor wants a fixed amount of cash flow periodically and least risk regarding capital which options should he considered:

—– is the rate at which banks borrow money from the RBI and the —–is the rate at which banks lend money to the RBI.

The possibility of higher interest rates in the market when the money is invested and locked already at lower interest rates is what can be called—

A fall in the interest rates and lack of opportunities to invest at desired high interest rate forcing the investor to keep the money idle until some opportunity arises is considered as—

The possible inability of the other party to deliver securities on purchase or funds on the completion of a sale is what is—

If the holder of a debt security is not able to find a counterparty for the desired price due to adverse price movements such a risk is termed as—

—is a market for uncollateralized lending and borrowing of funds and is open for participation only to scheduled commercial banks and the primary dealers.

“—which is lending of funds against buying of securities with an agreement to resell the said securities on a mutually agreed future date at an agreed price which includes interest for the funds lent.

“—- are the short-term instruments issued by banks generally to meet their liquidity and lending requirements.

—-are the short-term debt instrument issued by large financial institutions corporates and primary dealers to meet the short-term requirement of funds.

The Commodity Derivatives Exchanges have been using a —- to arrive at the prevailing spot prices

The —-is the custodian of the country’s foreign exchange reserves and is vested with the responsibility of managing their investment

“—-provides the statutory framework for the regulation of Foreign Exchange derivatives contracts

If the future is not “fairly” priced the trader may earn —-

If an investor wants to invest in gold but is worried about theft and don’t want to bear the cost of locker then he can invest and earn return similar to gold through:

At the money and Out of the money options have only Time Value but not any intrinsic value

Intrinsic value of put option—