National Board of Examinations 2008 Diploma Accounting

Test paper-2
Marks:50

Multiple option Single Answers


Q1. Which of the subsequent is NOT an example of a forward contract?

a) An agreement to buy a car in the future at a specified price.
b) An agreement to buy an airplane ticket at a future date for a certain price.
c) An agreement to buy a refrigerator today at the posted price.
d) An agreement to subscribe to a newsprint at a specified price at a future date.


Q2. The market price of a product or commodity is?

a) Determined by demand only.
b) Determined by supply only.
c) Influenced by government manipulation.
d) Determined by demand & supply.


Q3. Futures on individual stocks are allowed?

a) On all stocks listed on the stock exchange.
b) On few opted stocks only.
c) On all stocks listed on all stock exchanges in India.
d) On all stocks where price is more than Rs 100 per share.


Q4. If someone is bearish in the market?

a) He expects the market to rise.
b) He expects the market to fall
c) He expects the market to move sideways.
d) He expects the market to close.


Q5. A rice exporter will be purchasing rice soon. He is afraid that higher prices could wipe out his potential profits. What can the rice exporter do in the futures market to minimize his price uncertainty?
a) He can sell Rice Futures.
b) He should buy Rice Futures.
c) He cannot get any help from Futures and choices.
d) He should not get into Rice business.


Q6. The closing index value of the BSE Sensitive Index is computed using?

a) Last traded price of the index scrips.
b) Weighted avg. of the last 120 minutes trades of the index scrips.
c) The algorithm used to compute closing Sensex value.
d) None of the above.


Q7. The value of a derivative instrument?

a) Is fixed
b) Depends on the value of an underlying asset.
c) Is reset at fixed intervals.
d) None of the above.


Q8. An exchange traded futures contract is similar to an OTC(over the counter) derivative. a few common features are:

a) Both are tailored (e.g. non-standardised) instruments.
b) Both require margin collection by a clearing house.
c) Both are exposed to credit-risk i.e. risk of non-performance by counter party.
d) None of the above.


Q9. Futures contracts can be reversed with any member of the derivatives segment of the exchange?

a) True
b) False
c) Cannot be reversed
d) Cannot be reversed for the next 1 month.


Q10. Which is the oldest index in India?

a) BSE 30 Sensex
b) BSE100
c) S&P CNX Nifty
d) BSE200
Q11. Taking position in futures opposite to that in cash market for protecting cash market holdings is?

a) Speculating
b) Arbitrage

Earning:   Approval pending.