Financial Derivatives 2nd Set Solution for Assignments
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Q1. What is the difference between equity share and debenture?
Q2. What are the functions and responsibilities of intermediaries?
Q3. Evaluate the mechnaism of new issue.
Case Study
Commonly adopted methods of technology forecasting include the Delphi method, forecast by analogy, growth curves and extrapolation. Normative methods of technology forecasting — like the relevance trees, morphological models, and mission flow diagrams — are also commonly used.
The Delphi Method: The Delphi method is a structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. In the standard version, the experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts’ forecasts from the previous round as well as the reasons they provided for their judgments. Thus, experts are encouraged to revise their earlier answers in light of the replies of other members of their panel. It is believed that during this process the range of the answers will decrease and the group will converge towards the “correct” answer. Finally, the process is stopped after a pre-defined stop criterion (e.g. number of rounds, achievement of consensus, stability of results) and the mean or median scores of the final rounds determine the results.
Q.No 1: What is adopted methods of technology forecasting ?
Q.No 2: Discribe Normative methods of technology forecasting.
Q.No 3: Discribe implementation of Deplhi method.
Section C
Q1: ………….mutual funds invest money in specifically, high-quality and very short maturity-based money market instruments.
(A): money market
(B): bond credit rating
(C): corporate credit rating
(D): debtor credit rating
Q2. ………….are funds transfer systems where transfer of money or securities[1] takes place from one bank to another on a “real time” and on “gross” basis.
(A): current price and syndication
(B): real time gross settlement
(C): corporate counselling
(D): lease
Q3. A …….. level of political risk in a given country does not necessarily correspond to a high degree of political freedom
(A): high
(B): low
(C): medium
(D): no
Q4. Settlement in “real time” means payment transaction is not subjected to any …….. period.
(A): waiting
(B): debentures
(C): fixed deposits
(D): loans
Q5. Portfolio investors may face similar financial …….
(A): gains
(B): losses
(C): no profits
(D): expenses
Q6. ……means the transaction is settled on one to one basis without bunching or netting with any other transaction
(A): gross settlement
(B): bond markets
(C): debt markets
(D): Companies
Q7. ……….is “a market for short-term and Long term funds with maturity ranging from overnight to one year and includes financial instruments that are deemed to be close substitutes of money
(A): shares
(B): debentures
(C): tax saving bonds
(D): Indian money market
Financial intermediaries provide a number of advantages including the following:
(1) pooling of small savings
(2) diversification of risks
(3) economies of scale in monitoring information and evaluating investment risks
(4) lower transactions costs.
Q8. ……………..money market deals in short term finance repayable on demand, with a maturity period varying from one day to 14 days
(A): Operating
(B): call
(C): Cancellable
(D): non cancellable
Q9. An efficient national …… system reduces the cost of exchanging goods and services, and is indispensable to the functioning of the interbank, money, and capital markets
(A): payment
(B): payables
(C): products
Q10. A weak payment system may severely drag on the stability and developmental capacity of a….. economy; its failures can result in inefficient use of financial resources
(A): SEBI
(B): national
(C): NCLT
Q11. The……paid on call money loans, known as the call rate, is highly volatile.
(A): interest rate
(B): low risk of default
(C): high creditworthiness
(D): high net wor
Q12. It is diversified and has evolved through many stages, from the conventional platform of treasury bills and call money to commercial paper, certificates of deposit, repos, FRAs and IRS more recently.
(A): current assets
(B): current liabilities
(C): indian money market
(D): fixed assets
Q13. …….are instrument of short-term borrowing by the Government of India, issued as promissory notes under discount
(A): t bills
(B): credit rating
(C): lease
(D): hire purchase
Q14. The interest received on them is the discount which is the difference between the price at which they are issued and their………. value.
(A): Special purpose van
(B): redemption
(C): special public vehicle
(D): specific purpose van
Q15. Technical effciency of the payment system is important for development of an ………..
(A): common portfolio
(B): economy
(C): single portfolio
(D): single security
Q16. …..means to allow a positive value and a negative value to set-off and partially or entirely cancel each other out.
(A): price of securities
(B): netting
(C): buyers of securities
(D): TYPES OF SECURITIES
Q17. In the counterparty bankruptcy or any other relevant event of default specified in the relevant agreement if accelerated (i.e. effected), all transactions or all of a given type are netted (i.e. set off against each other) at market value or, if otherwise specified in the contract
(A): global deposits record
(B): close out netting
(C): gross domestic record
(D): gross deposit receipts
Q18. The legal obligations of the parties to make required payments under one or more series of related transactions are canceled and a new obligation to make only the net payments is created.
(A): invest in assets
(B): netting by novation
Q19. Derivatives allow investors to earn …….. returns from small movements in the underlying asset’s price.
(A): small
(B): large
(C): both
(D): none
Q20. For cash settled trades, this can be applied either bilaterally or multilaterally and on related or unrelated transactions.
(A): payment netting
(B): Govt
(C): SEBI
(D): stock exchange
Q21. …………….. facilitate the buying and selling of risk, and many financial professionals consider this to have a positive impact on the economic system.
(A): shares
(B): debenture
(C): mutual funds
(D): Derivatives
Q22. A legally enforceable arrangement between a bank and a counter-party that creates a single legal obligation covering all included individual contracts.
(A): bilateral netting
(B): multilateral netting
(C): both
(D): none
Q23. Non-mortgage-backed debt securities, whose………..flow characteristics depend on one or more indices and / or have embedded forwards or options.
(A): cost
(B): cash
(C): price
(D): profit
Q24. …………. taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country’s tax laws.
(A): customs
(B): International
(C): domestic
(D): cross country
Q25. …………… is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment.
(A): political risk
(B): economic risk
(C): industry risk
(D): corporate risk
Q26. ……… political risks affect all participants in a given country
(A): micro
(B): Macro
(C): small
(D): large
Q27. …………….. facilitate the buying and selling of risk, and many financial professionals consider this to have a positive impact on the economic system.
(A): shares
(B): debenture
(C): mutual funds
(D): Derivatives
Q28. A legally enforceable arrangement between a bank and a counter-party that creates a single legal obligation covering all included individual contracts.
(A): bilateral netting
(B): multilateral netting
(C): both
(D): none
Q29. A …….. level of political risk in a given country does not necessarily correspond to a high degree of political freedom
(A): high
(B): low
(C): medium
(D): no
Q30. Portfolio investors may face similar financial …….
(A): gains
(B): losses
(C): no profits
(D): expenses
Q31. Non-mortgage-backed debt securities, whose………..flow characteristics depend on one or more indices and / or have embedded forwards or options.
(A): cost
(B): cash
(C): price
(D): profit
Q32. …………. taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country’s tax laws.
(A): customs
(B): International
(C): domestic
(D): cross country
Q33. …………… is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment.
(A): political risk
(B): economic risk
(C): industry risk
(D): corporate risk
Q34. An institution that holds …….. in excess of the required amount is said to hold excess reserves.
(A): income funds
(B): growth funds
(C): reserves
(D): none of the above
Q35. Micro-level risks focus on sector, firm, or project specific risk
(A): micro
(B): Macro
(C): small
(D): large
Q36. Derivatives allow investors to earn …….. returns from small movements in the underlying asset’s price.
(A): small
(B): large
(C): both
(D): none
Q37. The treasury bills sold to the public and banks are called regular treasury bills. they are freely ………….
(A): marketable
(B): Financial
(C): Cancellable
(D): non cancellable
Q38. …..is an abbreviation for Repurchase agreement, which involves a simultaneous “sale and purchase” agreement
(A): company
(B): group
(C): repo
(D): managers
Q39. ……… political risks affect all participants in a given country
(A): micro
(B): Macro
(C): small
(D): large
Q40. Micro-level risks focus on sector, firm, or project specific risk
(A): micro
(B): Macro
(C): small
(D): large
