National Board of Examinations 2008 Diploma Accounting

a) True
b) False
c) True only in Mumbai
d) True only in Delhi


Q34. In case of futures, the initial margin is paid only by the seller & not the buyer?

a) True
b) False
c) True only in Mumbai
d) True only in Delhi


Q35. A scarce supply of the true commodity generally causes futures price to fall?

a) True
b) False
c) True only in Mumbai
d) True only in Delhi


Q36. If you have sold June Sensex Futures @ 4800, You will make profit if?

a) Futures prices go up
b) Future prices go down
c) None of the above


Q37. A warrant could be understood as?

a) A derivative instrument
b) A type of equity share
c) A type of debenture
d) A type of financial bond


Q38. In November, a trader feels that the interest rates as reflected in futures prices are going to fall in the next few days. The trader wants to take a spread position based on his view. What action will he take?

a) Buy near month & sell far month
b) Buy far month & sell near month
c) Buy near month & far month both
d) Sell near month & far month both


Q39. An Indian businessman imports regularly from the US. If he buys dollars in a forward contact, What is his plan?

a) Creating a hedge
b) Taking risk
c) Speculating on the dollar
d) None of the above


Q40. Use of Index Futures for hedging helps us eliminate the subsequent risk:

a) Stock specific risk
b) All possible risk
c) No risk
d) Market risk


Q41. If you wanted to create a perfect hedge for your portfolio, the value of index futures you would sell should equal?

a) Value of your portfolio/ Beta of your portfolio
b) Value of your portfolio* Beta of your portfolio
c) Value of your portfolio- Beta of your portfolio*100
d) Value of your portfolio+ Beta of your portfolio*100


Q42. Generally higher the price volatility, higher would be the initial margin requirement?

a) actual
b) False
c) True only in Africa
d) True only in Japan





Q43. Systematic risk is an investment risk peculiar to a company which can be decreased by diversifying one's portfolio?

a) actual
b) False
c) True only in Africa
d) True only in Japan

Q44. Credit risk on a derivative transaction includes?

a) Power Outage
b) Riots in the country
c) Credit exposure in the event of default & the probability of a counter party's default
d) Bank strikes


Q45. A derivative exchange faces?

a) Legal risk
b) Operational risk
c) Liquidity risk
d) All of the above


Q46. Liquidity risk can be caused by?

a) Sale of large number of shares which depress price significantly
b) High market capitalization
c) Failure of VSAT
d) Low market capitalization


Q47. Operational risks include losses due to?

a) Inadequate contingency planning
b) Limit on gross exposure
c) Market movement
d) Strict management control


Q48. Which of the subsequent type of loss would you attribute to legal risk?

a) IT department has seized books of accounts of a broker
b) Police department has arrested a broker
c) A contract cannot be enforced because of signature mismatch
d) None of the above


Q49. 1 of the methods to control financial risk is to have?

a) Exposure limits
b) Un-interrupted power supply limit
c) Speculate heavily
d) None of the above


Q50. When a deal is executed within the 2 investors of the identical broker in his office & then reported on BOLT, it is called?

a) Negotiated deal
b) Kerb deal
c) Cross deal
d) None of the above

Earning:   Approval pending.