Post - Graduate Diploma in Security Analysis & Trading (2 nd Semester Examination)

Transcription

1 Post - Graduate Diploma in Security Analysis & Trading (2 nd Semester Examination) Paper 203 Commodities for Capital Market Maximum Marks: 100 Time Allowed: 3 hours Roll No. Name. INSTRUCTIONS: 1. This Question Paper consists of 2 parts covering 5 sections in 5 pages. 2. Part I consists of objective type multiple choice questions for 70 marks. This part is sub-divided into 3 sections. Section 1 consists of 25 questions for 1 mark each. Section 2 consists of 10 questions for 3 marks each. Section 3 consists of 3 questions for 5 marks each. All the questions in part 1 have four alternative answers, of which only one is the correct answer. You are required to write the correct answer with proper reasoning and working, if required on the Answer sheet. 3. There is a penalty (50% negative marks) for all incorrect answers of Part Part II consists of descriptive type questions. This part is sub-divided into 2 sections. Section 4 consists of 5 questions for 3 marks each. Section 5 consists of 3 questions for 5 marks each. You are required to write the answer with proper stepwise explanation and working 5. All the questions are compulsory. In total you have to attempt 46 questions in 3 hours, use your time appropriately. 6. You are not allowed to leave your seat during the 1 st hour of the examination for what-so-ever reasons. 7. Sharing of resources is strictly prohibited. 8. Surrender any unauthorized material in your possession which you may have inadvertently brought into the examination room (including your MOBILE PHONES) before you start attempting your question paper. All the very best!!!

2 PART I Section I 25 questions of one mark each. 25* 1= 25 (15 questions of MCQ, choose the correct one from Q. No Questions of fill in the blanks (Q. No ). 5 questions of true & false (Q. No ) 1 First National commodity exchange in India was a) NCDEX b) NMCE c) MCX d) ENBOT 2 In Long position, trader will put a stop loss at a) Above Current price b) At current price c) Below current price 3 In short position, trader will put a SL at a) Above Current price b) At current price c) Below current price 4 In trailing Stop loss, trader is guaranteed regarding a) Profit b) Loss c) No Profit, No Loss 5 Which is the first international Commodity exchange? a) CBOT b) LME c) NYMEX d) TOCOM 6 CHARJDDEL is a trading symbol of a) Chana b) Chandi c) Coconut d) Rubber 7 OTC Derivatives are considered to be risky because? a) They are settled on a clearing house b) Easily managed by two parties c) Do not have standardization of quantity, quality, and time and ounter party risk d) All of the above 8 Bull Spread is a) Buy near month, sell far month b) Sell near month, buy far month c) Buy near month, buy far month d) Sell near month, sell far month 203-1

3 9 Selling a future contract to hedge cash position is called a) Long Hedge b) Short Hedge c) Arbitration d) Speculation 10 Hedge ratio with reference to commodity future contract means a) %age difference between the futures price and cash price b) Quantity of futures contract to be sold irrespective of the physical exposure c) Quantity of futures contract to be bought against physical exposure d) Percentage difference in the prices of two future contracts 11 The payoff for a person involved in long hedge when the cash & futures prices rise is a) Profit in cash market and loss in futures b) Loss in cash markets & profit in futures c) Profit in both cash and futures market d) Loss in both cash and future markets 12 A sells (Short) one crude oil futures at Rs per barrel, and bought at Rs. 2300/ Barrel? Lot size 100 Barrels, what is total loss or profit? a) (-) Rs b) (-) Rs c) (+) Rs d) (-) Rs 1,00, Bullions includes a) Gold and Silver b) Copper, Zinc, Nickel c) Crude Oil, Brent Crude Oil d) Sponge Iron 14 Exchange levies initial margin on derivatives contract using the concept of a) TVM b) VAR c) IRR d) NP V 15 The First use of derivative contract was a) To manage price uncertainty b) For speculation c) For arbitrage Fill in the Blanks (Q. No ) 16 Trading unit of Silver MCX is 17 DPR stands for 18 GTC order stands for 19 Kabra Committee was formed in the year 20 CBOT stands for 203-2

4 State True or False (Q. No ) 21 DPR can be revised after hitting first upper or lower DPR 22 Expiry Date of commodity contract can be modified with mutual consent of Buyer and Seller 23 Member can make 100% security deposit for taking membership of MCX in the form of FDR / BG 24 Future price is more than spot price and hence basis is positive 25 When price of near month future is more than the far month future then market is said to be inverted marked Section II 10 Questions (Q. No ) of 3 marks each 10*3 =30 (Choose the appropriate answer and give reasons) 26 TP/DP Margin in futures contract applied on a) Before Delivery / before expiry of contract b) After Delivery / after expiry of contract c) On Delivery 27 Buyer / Seller Gives / takes delivery at a) Exchange designated warehouses b) Buyer place c) Seller place d) Mutually designated place 28 Meaning of Spread a) Difference in price of two futures contract b) Difference in quantity of two futures contract c) Difference of commodities 29 Market order is a) Executed at the best available price b) Executed at the best available quantity irrespective of price c) Executed at the price given in order entry 30 Calendar Spread Margin is useful for a) Speculator b) Hedging position between contracts c) Not at all useful for anybody 203-3

5 31 Trader who is selling Put Option is a) Bullish, Receiver of premium b) Bearish, Payer of premium c) Bullish, Payer of premium d) Bearish, Receiver of premium 32 A trader requires to take a long gold futures position worth Rs.5,00,000 as part of his hedging strategy. Two month futures trade at Rs.6500 per 10 gms. Unit of trading is 100 gms and delivery unit is one Kg. How many units must he purchase to give him the hedge? a) 8 Units b) 10 Units c) 12 Units d) 15 Units 33 On the 15th of June a firm involved in industrial fabrication knows that it will require kgs of silver on August 15 to meet a certain contract. The spot price of silver is Rs.1680 per kg and the August silver futures price is Rs A unit of trading is 5 Kgs and the delivery unit is 30 Kgs. The fabricator can hedge his position by a) Buying 1000 units of August silver futures b) Buying 6000 units of August silver futures c) Selling 6000 units of August silver futures d) Selling 1000 units of August silver futures 34 How Commodities futures contract are different from financial futures contract? a) Standardized Contract Size b) MTM Settlement c) Varying quality of underlying asset d) Exchange Traded 35 Physical Delivery in case of commodity futures should be of a) Standard Quality with specified tolerance limit b) Standard Quantity with specified tolerance limit c) Either A or B d) Both A and B Section III 3 Questions of 5 marks each. 5*3 =15 (Choose the appropriate answer with reasons. Also, shows the calculations if required) 36 Mr. A buys 3 month call option contract on June gold futures at strike price of Rs. 7000/10 gms for which he pays premium of Rs. 150 per /10 gms, If at expiry, June gold future price is 7500/10 gms then what is the pay-off for Mr. A? ( Lot size 1 Kg) a) (+) 40,000 b) (-) 40,000 c) (+) 35,000 d) (-) 35, A Buys 1 Lot of Mentha oil future at 600 Rs/ Kg, and sold it at 650 / Kg in futures. What is total profit / loss? Lot Size 360 Kgs (2 Drums) and Price Quotation 1 Kg. a) (-) Rs b) (-) Rs 1,80000 c) (+) Rs d) (+) Rs 1,

6 38 If the price quotation factor / base unit of guar seed futures contract is 100 Kg and the market lot / trading unit of guar seed futures contract is 10,000 Kg, then what is the value of one contract of FEB guar seed futures contract which is currently trading at 1500 /100 Kg? a) 15, 000/- b) 1, 50,000/- c) 3, 00,000/- d) 30, 000/- PART II (SUBJECTIVE) Section IV 5 Questions of 3 marks each 5*3 = What is spread? Differentiate between buying and selling spread with example. 40 What is Cash & carry and reverse cash and carry arbitrage? 41 What are forward, futures and options? How commodities future contracts can be used? What are the requisites for a successful contract? 42 Give in brief, evolution of Indian Commodity Market? 43 What is Margin? Types of margin levied from time to time on different commodities? Section V 3 Questions (Q. No ) elaborate. 3*5 = Meaning and Objective of Commodity futures? And also explain pricing of commodity futures? 45 What are the different types of Orders one can punch through ODIN / MCX Trader workstation? 46 What is hedging? Types and advantages of hedge. Support your answer with any commodity * * * * * 203-5