CBSE Class-12 Exam 2020 : Question Paper (Derivative Market Operations)

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CBSE Class-12 Exam 2020 : Question Paper (Derivative Market Operations)

Subject :- Derivative Market Operations
Class : XII
Year : 2020

SECTION A

Part I

Attempt any 10 questions. Each question is of 1 mark.

1. Who writes an Option Contract ? 1

2. Name the privately negotiated derivative contracts. 1

3. Name any two underlying instruments traded in NSE’s Derivative Market. 1

4. Which method is used to calculate Nifty in NSE ? 1

5. What is the ideal beta of ‘Nifty Index’ ? 1

6. Name the derivative market participant who enters with the strategy of ‘Buy futures  Sell spot’ in an underpriced futures market. 1

7. Define ‘unsystematic risk’. 1

8. State the relationship between intrinsic value and time value. 1

9. Name the option which leads to zero cash flow. 1

10. How is dividend related to call and put option ? 1

11. What is meant by participant in the daily trading system ? 1

12. How is a member’s Net Worth calculated ? 1

Part II

Attempt any 5 questions. Each question is of 2 marks.

13. Differentiate between the hedger and arbitrageur. 2

14. State any two points of economic significance of index movement. 2

15. Give any two differences between commodity and stock futures. 2

16. What is meant by ‘Reverse cash and carry’ ? 2

17. What is meant by ‘systematic risk’ ? How can it be minimized ? 2

18. An investor on March 12, 2019 bought 2,000 shares of Tata Ltd. at the price of < 390 per share. The portfolio value being < 7,80,000 (< 390  2,000). The investor feels that the market will fall and thus needs to hedge by using Tata Futures (stock futures). 2

 The Tata Futures (near month) trades at < 402.
 To hedge, the investor will have to sell 2,000 Tata Futures.
 On futures expiry day : The Tata Futures spot price is < 300.

Find out the final Profit/Loss position of the investor.

19. What is meant by ‘Stop Loss’ in Derivatives ? Give one example. 2

Part III

Attempt any 5 questions. Each question is of 3 marks.

20. Give any three differences between futures and forward contracts. 3

21. What is meant by futures pricing ? ABC trades at < 1,500 in the spot market. Money can be invested at 10% p.a. What is the fair value of a 3 months futures contract on ABC ? (Assume : e^ ·025 = 1·02) 3

22. Describe the contract specification of CNX Nifty Option. 3

23. Explain ‘market watch window’. 3

24. Describe the eligibility requirements of a professional clearing member. 3

25. Calculate STT. ‘A’ sold option contract at strike price < 380 @ 20. At the expiry the spot market price closes at < 430. Lot size is 1,000. (STT w.e.f. June, 2016 is 0·05% on sale on an option contract) 3

26. How is tax liability calculated in case of derivative contracts ? Explain. 3