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EQUITY DERIVATIVES

POST GRADUATE DIPLOMA IN FINANCIAL


MARKET PRACTICE 


Term-End Examination


June 2010 


MFP-2: EQUITY DERIVATIVES



Time: 3 hours                                                              Maximum Marks: 100


 

Note: Attempt any five questions. All questions carry equal marks.

  1. Describe the types of derivatives. Discuss the features of OTC derivatives markets. What are the uses of these derivatives?


 

  1. What are swapped? Differentiate between different types of swaps with the help of suitable examples.



  1. What are call and put options? Illustrate with an example. Discuss the different factors which determine the movement of options prices.



  1. What is the need and purpose of hedging? Explain the different types of option strategies for hedging.



  1. What are the basic principles of risk management? How is risk measured?



  1. (a) Discuss the script selection criteria for the derivative segment.


(b)  Explain the procedure adopted for calculating the Quarte Sigma Order Size.

  1. Differentiate between dividends and Bonus issue. How stock prices are calculated when a dividend is paid out? Explain with a suitable example.



  1. What is Equity Derivative Market? What is its rationale? Discuss the different types of derivative markets? Explain their advantages.


 
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