Final PN-14 SFM Quiz 6

1. The sterling is trading at $1.6400 today. Inflation U.K. is 3.8% and that in U.S.A. is 2.9%. What would be the spot rate ($/£) after 2 years?

2. The United States Dollar is selling in India at Rs.45.20. If the interest rate for a 6-months borrowing in India is 10% and the corresponding rate in USA is 4%, what would be the rate of forward premium/(discount)?

3. The spot and 6 months forward rates of £ in relation to the rupee (Rs./£): are Rs.77.9542/ 78.1255 and Rs.78.8550/9650 respectively. What will be the annualised forward margin (Premium with respect to Ask Price)?

4. An Indian company is planning to invest in US. The US inflation rate is expected to be 3% and that of India is expected to be 8% annually. If the spot rate currently is Rs.45/US $, what spot rate can you expect after 5 years?

5. Which of the following is/are feature/s of GDRs ?

6. Which of the following is/are advantage/s of ADRs ?

7. Shibosai bond is a bond           

8. A Yankee bond is   

9.                            is a private arrangement between lending banks and a borrower.

10.                                        are underwritten and have a maturity of up to one year.

11. Which of the following bonds are denominated in Yen?

12. Plain vanilla interest rate swaps involved                 .

13. Covered Call Writing means     .

14. The writer of the option is also known as a               

15. American options are those     .

16. Backwardation occurs when    .

17. Maintenance margins deposited by an investor in a futures contract is             .

18. Buying and selling call or put option with the same strike price but different expiration dates is called           -

19. The market in which the futures price is greater than the spot price is referred to as    .

20. Which of the following is/are underlying instrument(s) in a Forward Rate Agreement?

21. A buyer of forward contract will make profit if       -

22. In June 2022, a six month Call on Ritz Ltd.’s stock with an exercise price of Rs.25 sold for Rs.5. The stock price

was Rs.20. The risk- free interest rate was 5% per annum. How much would you be willing to pay for a Put Option on Ritz Ltd.’s stock with same maturity and exercise price?

[Given: PVIF (5%, 1/2 year) = 0.9756]

23. The stock of ABC Ltd. sells for Rs.240. The present value of exercise price and the value of call option are Rs.217.40 and Rs.9.60 respectively. What is the value of put option?

24. If the share of BA Ltd. (F. V. Rs.10) quotes Rs.920 on NSE, and the 3 months futures price quotes at Rs.950, and the borrowing rate is given as 8% and the expected annual dividend yield is 15% p.a. payable before expiry, then the price of 3-month BA Ltd. futures would be       .

25. An investor buys 100 shares of a sugar mill at Rs.210 per share and at the same time writes a September Rs.250 call at a premium of Rs.20 per share. If the expiration date price is Rs.280, calculate the net gain/loss.