Devi Ahilya University 2007 Diploma Financial Management FINANCIAL RISK AND DERIVATIVES - Question Paper

June - July 2007
Master of Business Administration (MBA) exam

(Full time) IV Semester
FINANCIAL RISK AND DERIVATIVES

Time three Hours] [Max. Marks 90
Note : Attempt any 3 ques. in part A consisting of 22 marks every. part B
is compulsary consisting of 24 marks.

part A
1. What do you mean by Financial Risk ? elaborate various kinds of financial risks ? explain the risk
management strategies.
2. Distinguish ranging from call choice and put choice. explain how values of call choice are determined.
3. What is Stock Index Futures ? How can risk be hedged under stock index futures ?
4. explain the nature of Currency swaps. Exlplain with the help fo example currency swap transaction.

part B
1. discuss Index choice and Put Call Parity.
2. In May beginning you decide that shares in Futres Ltd. will rise over the next month or so. The current
price is Rs. 200 and you hope that the shares will be at Rs. 250 by the end of July.
provide your opinion and explanation when :
(i) no choice is traded.
(ii) choice is traded.

Earning:   Approval pending.