Sunday, November 28, 2010

Who holds Power Baton in Bollywood

An article by Puneet Singh





The origin of this article is in the rushes of Bollywood in the daily reality shows where producers are promoting their upcoming films. For example, Aishwarya’s recent visit to Master Chef India confirms the extent to which film marketing has gone to. But amongst this entire hullabaloo, I try to scrape out the power exuberated by these Bollywood icons. It astonishes me to see news reports telling us where a famous actress’s mother fell down! Come on, the whole India isn’t waiting to hear that.

But that is power. The power of a name, face and iconic personality.

Aishwarya Rai and Shah Rukh Khan may be Bollywood’s faces to the west but it’s not for anything unsaid and passé. Is power demonstrated by traffic stopping in Berlin for SRK or being the world’s most beautiful face and being in India! Don’t you think it actually is? But can we equate power and acting? Is it proportional or what actually matters is how many Bombay Times parties have you been attending and the IPL teams you own? As a skeptic to this, I wonder if I can say Vidya Balan, Kajol, Juhi Chawla, Akshay Khanna and Abhay Deol for instance are way powerful than Katrina Kaif and Akshay Kumar?

Kareena Kapoor is a part of the handful who are the bell ringers in both the areas. Her penultimate scene acting in Kurbaan ( I highly recommend the last 5 minutes of the movie) can send shivers down! What a powerful acting! And yes, she is the paparazzi favorite too! Abhay Deol in Dev D shocked us! His portrayal of the drunk lover got the attention of critics and masses alike! It wasn’t his star image that pulled the audience to the multiplexes, it was purely his acting! Do we define power like that then?

Power in crude and real terms is ‘how much you matter to the world, or probably masses’. Is the world waiting for your next move? Or is it talking of your last alleged affair still? Its intimidating to know how fake and unreal these people need to be. I was watching a video on YouTube where Jennifer Aniston had caused a major airport rush as she came after a break up with John Mayer and the entire press had gone crazy for her statement on the same! That’s power for her, don’t you think? Come what may, we all like attention, don’t us? It is like the fourth level of Maslow’s need hierarchy- Self esteem needs!

We all admire these people. We all wish to wear their shoes and live their lives. Ultimately, that is power! Let me not touch anything or anyone apart from Bollywood in regards to power, because India holds great people who don’t feature on Page 3 but move mountains and do great things. I feel Bollywood comes closest to us, because it is what we want and ultimately these celebs are delivering it.

Power is to move and move others, with your every move! And its exemplified exactly why people are more interested in Jennifer Aniston and David Beckham than Julia Roberts and Ricky Ponting!

Power shows and well!


PS: It is my analysis and my views. Any contradictions are most welcome. It’s a personal opinion.

Meaning of the Areas in Bangalore

By VINAY KUMAR C  
Know the meaning of the Areas in Bangalore(Know our bangalore better with their meaning !!)                                                       
                                                                            
 Marathahalli                                                               
 Halli in Kannada means village. A fighter aircraft named Marut had an      
 accident in this area; So the area is called Marathahalli.                 
                                                                            
 BTM Layout                                                                 
 BTM Layout (an abbreviation of Bannerghatta, Tavarekere and Madivala       
 Layout)                                                                    
                                                                            
                                                                            
 Malleswaram                                                                
 Malleswaram, located in the north-west of Bangalore, derives its name from 
 the famous Kaadu Malleshwara temple.            
                                                                            
 HSR Layout                                                                 
 Hosur Sarjapur Road Layout (popularly known as HSR Layout) is a relatively 
 new suburb located to the south-east of Bangalore, India. The layout,      
 which is built on land reclaimed from the Agara lake, is located between   
 Hosur Road and Sarjapur Road.      
 
Arekere                                                                    
 Are in Kannada means half. Kere in Kannada means a water reservoir or      
 pond. The origin of the name "Arekere" comes comes from a water reservoir  
 which is in the area.                                                      
                                                                            
 Banashankari                                                               
 Banashankari is a neighborhood in South Bengaluru. It gets its name from   
 the Banashankari Amma Temple on Kanakapura Road, one of Bengaluru's oldest 
 and most famous temples, which was constructed by Subramanya Shetty in     
 1915.                                                                      
                                                                            
 Basavanagudi                                                               
 The name "Basavanagudi" refers to the Bull Temple that is located here. It 
 is a monolith statue of the Nandi Bull. Basava in Kannada, the local       
 language, means Bull and Gudi means temple. Hence, the name Basavanagudi   
                                                                            
 Basaveshwaranagar                                                          
 It is named after poet-king Basaveshwara. Basaveshwaranagar is also known  
 to have a 100 year old tree "The Big Banyan Tree - Dodda Aalada Mara"      
 which was a home for hundreds of monkeys now a known public park in the    
 vicinity.                                                                  
                                                                            
Domlur                                                                     
 Domlur is a small township located in the eastern part of Bangalore city   
 in India. Earlier it was known as Bhagat Singh Nagar, but for some unknown 
 reasons, it is better known as Domlur. There is a debate over the exact    
 meaning of Domlur. From what can be deciphered from old people living in   
 the area, Domlur is a word derived from Tombalur, a kind of flower which   
 is used to worship Lord Shiva. This is further supported by the            
 inscriptions found in Chokkanathaswamy temple in Domlur, which is believed 
 to be constructed by Cholas                                                
                                                                            
 Electronics City                                                           
 Electronics City is an electronics industrial park spread over 332 acres   
 (1.3 km) in Konappana Agrahara and Doddathogur villages, just outside      
 Bangalore, India. It houses more than a hundred industries, including IT   
 industry leaders such as Wipro,Hewlett- Packard, Motorola, Infosys, CGI,    
 Siemens, ITI,Satyam etc. The area is maintained by Keonics, which provides 
 all the necessary infrastructure.                                          
                                                                            
 Halasuru                                                                   
 Halasuru formerly known as Ulsoor, is one of the oldest neighbourhoods in  
 the Indian city of Bangalore. It has a predominant Tamil speaking          
 population and is renowned for its numerous temples and rather narrow      
 streets.                                                                   
                                                                            
 Hebbal                                                                     
 Once indicative of the North endpoint of the city. Though originally       
 famous for Hebbal Lake, it is now better known for the serpentine maze of  
 flyovers The flyover spanning a length of 6.25 kilometres over all the     
 loops combined, is the longest flyover in India.The lake is well known for 
 the park, the boating facility and for the bird watching opportunities.    
                                                                            
Jayanagar                                                                  
 Jayanagar means - literally - "Victory City". Jayanagar was traditionally  
 regarded as the southern end of Bangalore. The "South End Circle", wherein 
 six roads from different areas meet, and the historic Ashoka Pillar (which 
 was to mark the southern end of the city) bear this fact. While newer      
 extensions have taken away this distinction from Jayanagar, it still       
 remains one of the more southern parts of the city.                        
                                                                            
 J P Nagar                                                                  
 The Jayaprakash Narayan Nagar ( JP Nagar ) was basically a residential     
 area. J P Nagar is home to many prominent singers, actors and artists.     
 Famous residents of this locality include Kannada Superstar actor and      
 politician Ambareesh, playwright and actor Girish Karnad, former Karnataka 
 chief minister H.D. Kumaraswamy and actress Tara.   
*** (even i stay in this area)                      
                                                                            
 Jeevanbheemanagar                                                          
 Originally, the area was reserved for employees of LIC (?Jeevan Bheema)and 
 KPWD. Therefore the area predominantly consists of LIC quarters (types     
 L,M,N,P) and KPWD quarters (types A,D).                                    
 
 
Kengeri                                                                    
 In it flows the river vrishbhavati which carries the entire sewage of      
 bangalore in it making kengeri somewhat smelly but there is a need to      
 manage sewage treatment properly in the Indian state of Karnataka.         
 
 
Koramangala                                                                
 Koramangala was not too long ago, a sought after residential locality with 
 its wide boulevards and posh bungalows. The crime rate has increased       
 considerably over the past few years. Though the civic authorities are     
 trying hard to cope with the unprecedented stress of improvising the       
 infrastructure, a lot needs to be done.                                    
 
 
Rajajinagar                                                                
 Rajajinagar got its name from Rajaji the great freedom fighter from        
 Southern part of India. It has many schools and colleges that gives the    
 best coaching. It boasts of having the highest number of bar and           
 restaurants in Bangalore.                                                  
                                                                            
 Rajarajeshwari Nagar                                                       
 Rajarajeshwari Nagar received its name from the famous Rajarajeshwari      
 Nagar temple that is located just over one kilometer from the arch.        
                                                                            
 Sadhashivnagar                                                             
 Sadashivanagar is arguably the most elite and expensive neighborhood in    
 Bangalore, India, and is fashionable among politicians, movie stars, and   
 most of the city's millionaires who can afford homes there. As the "?      
 Beverly Hills of Bangalore," having an address in Sadashivanagar connotes  
 a high level of prestige, success, and/or fame. Famous residents of this   
 locality include Kannada Superstar-late Dr.RAJKUMAR- ANNAVARU, Former Chief 
 Minister SM KRISHNA,                                                       
                                                                            
 Thyagarajanagar                                                            
 Thyagarajanagar is one of the oldest localities in Bangalore. It is part   
 of Basavanagudi in South Bangalore. This area is home to several religious 
 temples and is the only area where you can find religious songs hitting    
 the charts everyday.                                                       
                                                                            
 Vijayanagar                                                                
 It derives its name from the Vijayanagara empire that flourished in south  
 India during 15th and 16th centuries.Vijayanag ar East is popularly known   
 as RPC Layout (Railway Parallel Colony Layout), since this layout is along 
 the railway track. It has been recently renamed as Hampi Nagar. Hampi was  
 the capital of the Vijayanagar Empire. Vijayanagar also houses a large     
 Public Library, which is one of the largest in Karnataka.                  
                                                                            
 Nagarbhavi                                                                 
 Nagarbhavi means literally "a well of snakes". The name is due to the high 
 number of snakes present in the area. Also, some believe that it is called 
 a "well" because of the surrounding hillocks that are no longer present    
 due to urbanization. Nagarbhavi is located between Mysore road and Magadi  
 road.                                                                      
                                                                            
 Whitefield                                                                 
 Until the late 1980s, Whitefield was a small village which was a           
 retirement colony for Anglo-Indians. It remains a legacy of the British    
 rule in India. It is renowned for Sathya Sai Baba's ashram called          
 Brindavan and as a heaven for a number of multinational information        
 technology companies.

Wednesday, November 17, 2010

LAPTOPS - THREAT TO MALE FERTILITY

Melbourne, Nov 06 (ANI): Men who use their laptops while keeping them in their laps could be risking their fertility, a new research has found.

A new study by Fertility and Sterility has found that when men use their laptops in their laps instead of on their desks, they may be overheating those male parts, which, in turn, may be damaging their sperm.

In studies, even men who used laptop pads as a buffer between their machine and their man parts, dangerously overheated themselves within 10 minutes.

The authors noted that other rese
arch has shown that warming the scrotum more than 1.8 degrees is enough to damage sperm.

After one hour, the 29 subjects working with a laptop on their knees had raised the temperature in their testicles by more than 4 degrees.owever, Yefim Sheynkin, lead author of the study and State University of New York urologist, stated that this is not proof that laptops definitely lead to infertility among men

Source - Yahoo News

Tuesday, November 16, 2010

NCFM CAPITAL MARKET PART 1

CAPITAL MARKET (DEALERS) MODULE


Q:1    A trading member shall be deemed guilty of misconduct if he fails to _______ [ 1 Mark ]
(a) submit its audited accounts to the Exchange
(b) pay its subscription, fees, arbitration charges or any other money which
may be due to the exchange
(c) to submit or makes any false or misleading statement in its clearing forms
(d) All of the above


Q:2    The Message Window in the NEAT system allows a user to view messages vbroadcast by the Exchange such as, __________     [1 Mark ]
(a) corporate actions
(b)  market news
(c) auctions related information
(d) All of the above


Q:3    100 share of Reliance Ltd. are purchased on Monday. Provided there are no holidays in between, settlement should take place on ______ ? [ 2 Marks ]
(a) Wednesday (T+2)
(b) Tuesday (T+1)
(c) Thursday (T+3)
(d) Friday (T+4)


Q:4.   ______  is a volume related order condition.      [ 2 Marks ]
(a) An order with a limit price condition only
(b) An order with a stop loss only
(c) An order with a Disclosed Quantity (DQ)
(d) None of the above


Q:5   The branch manager receives End of Day reports for _________. [ 2 Marks ]
(a) his own orders only
(b) all dealers under the trading member
(c) all the dealers under that branch
(d) any authorized user


Q:6   The following facility allows the user to have a drop down list of client codes at the account field:               [ 2 Marks ]
(a) Client List Master
(b) Client Database Master
(c) Client Code Master
(d) Client Master Maintenance


Q:7   When the user invokes the order entry screen, the field(s) that are (is) taken as default are (is) __________.             [ 2 Marks ]
(a) Symbol
(b) Series
(c) Book Type
(d) All of the above


Q:8  In case the security has not been traded on a particular day, ________ at the NSE is to be considered as the closing price.?             [ 2 Marks ]
(a) the average closing price for the last one week
(b) the theoretical closing price
(c) the latest available closing price
(d) none of the above


Q:9   Auction is held in PQR for 10,000 shares.
The closing price of PQR on that day was Rs.259.00
The last traded price of PQR on that day was Rs.254.0
The close price of PQR last Friday was Rs.255.00
The previous day's close price of PQR was Rs.264.00
What is the maximum allowable price at which the member can put a sell order
in the auction for PQR? (Assume Price Band applicable for Auction market is +/ -20%) [ 3 Marks ]
(a) Rs. 316.80
(b) Rs. 390. 65
(c) Rs. 364
(d) Rs. 394


Q:10 A trading member on the NSE, has a branch order value of Rs. 950 lakh for his Mumbai branch and Rs. 600 lakh for Delhi branch. Mumbai branch has two users 'X' and 'Y' with user order value limits of Rs. 300 lakh and Rs. 400 lakh
respectively. Delhi branch has one user 'Z' with user order value limit of Rs.
550 lakh. The member applies for a new user at Mumbai. What is the maximum
user order value that can be set for the new user?       [ 3 Marks ]
(a) Rs. 100 lakh
(b) Any amount, as there is no restriction on User Order Value
(c) Rs. 250 lakh
(d) Rs. 150 lakh


Q:11 Securities and funds pay out  takes place on ______ working days after the trade date.                       [ 2 Marks ]
(a) ‘T+3’
(b) ‘T+1’
(c) ‘T+2’
(d) within 24 hours of sale


Q:12 NSE has implemented ______________ in compulsory rolling settlement with effect from July 02, 2001.             [ 1 Mark ]
(a) securities-based market -wide circuit breakers
(b) index-based market- wide circuit breakers
(c) market- wide based securities-wise circuit breakers
(d) none of the above


Q:13   The clients introduced by an authorised person to a trading member, would be required to deliver securities and make payments directly in the trade name of the trading member. True or False?      [ 1  Mark ]
(a) True
(b) False


Q:14 Security wise User Order Quantity Limit (SUOQL) can be modified anytime
during trading hours. True or False?           [ 2 Marks ]
(a) True
(b) False


Q:15 ______ can be traded in the Limited Physical Market?        [ 1 Mark ]
(a) Illiquid shares
(b) Futures and Options
(c) Odd lots
(d) Government Securities


Q:16 Securities Delivered Statement: This statement provides information on
______?                   [ 1 Mark ]
(a) delivering centre
(b) total number of shares to deliver for each security
(c) quantity delivered and quantity of shares delivered short
(d) all of the above


Q:17 If a client buys shares worth Rs. 5,25,000 and sells shares worth Rs. 4,75,000 through a broker, then the maximum brokerage payable to broker is ___.
[ 2 Marks ]
(a) Rs. 25,000
(b) Rs. 15,000
(c) Rs. 10,000
(d) Rs. 20,000


Q:18 An advertisement released by a trading member can contain a recommendation regarding purchase or sale of any particular share or security of any company.
True or False?                  [ 2 Marks ]
(a) True
(b) False


Q:19 No payment for transaction in which a Trading Member is taking position as a principal will be allowed to be made from the client’s account ?         [ 2 Marks ]
(a) True, unless his clients approves the payment
(b) True
(c) True, only if his clients are making payments on time
(d) False


Q:20 The Trading Members shall keep the dematerialised securities of Constituents in a separate beneficiary account distinct from the beneficiary account maintained for holding their own dematerialised securities.   True or False?
[ 1 Mark ]
(a) True
(b) False


Q:21 A portfolio contains securities with the expected return as follows:-
Security Probability Return
A  30  10
B  40  12
C  30  15
What will be the expected return of the portfolio?            [ 1 Mark ]
(a) 12.80
(b) 23
(c) 12.30
(d) 14.70


Q:22   ___________ assumes the counter party risk of each member and guarantees
financial settlement.               [ 2 Marks ]
(a) SEBI
(b) Central Depository Services Ltd. (CDSL)
(c) The National Depository Services Ltd. (NSDL)
(d) The National Securities Clearing Corporation Ltd. (NSCCL)


Q:23  What does 'OM' indicate as an activity in the 'Activity Log' screen in the NEAT
system?                                                                    [1 Mark ]
(a) Order Matched
(b) Order Cancelled
(c) Trade Modified
(d) Order Modified


Q:24  One of the requirements for admission to membership on the NSE is to pass
an on-line examination under NSE’s Certification in Financial Markets (NCFM).
[ 1 Mark ]
(a) True
(b) False


Q:25  Where a recognised stock exchange acting in pursuance of any power given to it by its bye-laws, refuses to list the securities of any company, the company shall be entitled to be furnished with reasons for such refusal and the company may appeal to the _________ against such refusal.     [ 1 Mark ]
(a) SEBI
(b) recognized stock exchange
(c) Securities Appellate Tribunal (SAT)
(d) High Court


Q:26  Surveillance and Control (SURCON) is that period after market close during which, the users have _______ only.          [ 1 Mark ]
(a) order entry access
(b) trade cancellation access
(c) trade modification access
(d) inquiry access


Q:27  A stock-broker shall not encourage sales or purchases of securities with the sole object of generating brokerage or commission. Is the above statement True or False, under the Code of Conduct Guidelines prescribed under SEBI (Stock Brokers & Sub- brokers) Regulations, 1992.      [ 2 Marks ]
(a) True
(b) False


Q:28  At the end of the trade cycle, the trades are _______ to determine the obligations of the trading members to deliver securities/funds as per settlement schedule.                      [ 2 Marks ]
(a) grossed
(b) aggregated
(c) netted
(d) offset


Q:29  The NSCCL interposes itself as a central counterparty between the counterparties to trades and nets the positions so that a member has security wise net obligation to receive or deliver a security and has to either pay or receive funds. True or False?           [ 1 Mark ]
(a) True
(b) False


Q:30 For liquid securities, the VaR margins are based on the ________ of the
Security.                [ 2 Marks ]
(a) volatility
(b) returns
(c) liquidity
(d) exposure limit


1 (d) 21 (c)
2 (d) 22 (d)
3 (a) 23 (d)
4 (c) 24 (a)
5 (c) 25 (c)
6 (d) 26 (d)
7 (d) 27 (a)
8 (c) 28 (c)
9 (a) 29 (a)
10 (c) 30 (a)
11 (c)
12 (b)
13 (a)
14 (a)
15 (c)
16 (d)
17 (a)
18 (b)
19 (b)
20 (a)

NCFM CAPITAL MARKET PART 2

Q:31 The stamp duty on transfer of demat securities has been waived. True or False? [ 1 Mark ]
(a) True
(b) False


Q:32 No person shall be admitted as trading member of a recognized stock exchange if he has been adjudged bankrupt or a receiver order in bankruptcy has been made against him or he has been proved to be insolvent even though he has obtained his final discharge. True or False? [ 1 Mark]
(a) True
(b) False


Q:33 The stop loss orders are prioritised in the stop loss book with the 
__________________ [ 1 Mark ]
(a) most likely order to trigger first and the least likely to trigger last.
(b) least likely order to trigger first and the most likely to trigger last.
(c) time- price priority algorithm
(d) none of the above


Q:34 The orders with ______ attribute disclose only a part of the total order quantity to the market. [ 1 Mark ]
(a) Immediate or Cancel (IOC)
(b) Stop Loss (SL)
(c) Disclosed Quantity (DQ)
(d) none of the above


Q:35 Two buy orders enter into the system and are unmatched :
1) 200 shares @ Rs. 72.75 at time 10:30 a.m.
2) 300 shares @ Rs. 72.75 at time 10:31 a.m.
Which order will get a priority for getting executed. [ 1 Mark ]
(a) Order no. 1.
(b) Order no. 2
(c) both will have equal priority
(d) none


Q:36 Statement 1 : An active buy order matches with the best passive sell order if the price of the passive sell order is less than or equal to the price of the active buy order. 
Statement 2 : An passive buy order matches with the best active sell order if the price of the passive buy order is less than or equal to the price of the active sell order.
Which of the above statement s is True?
[ 2 Marks ]
(a) Statement 2
(b) Statement 1
(c) Both statements are true
(d) Both statements are false


Q:37 The pre -set Market price protection percentage is by default set to _____ of the LTP. [ 2 Marks ]
(a) 10%
(b) 2%
(c) 3%
(d) 5%


Q:38 A user can simultaneously view a regular inquiry (e.g. MBP) and the Snap Quote display on the trading screen. True or False? [ 2 Marks ]
(a) True
(b) False


Q:39 Fixed Deposit Receipts (FDRs) issued by approved banks can be submitted as a(n) ___________ to NSCCL by trading members. [ 2 Marks ]
(a) surety.
(b) indemnity
(c) warranty
(d) additional base capital


Q:40 A trading member on the NSE, has set the branch order value unlimited for his Chennai branch and Rs. 800 lakh for Kolkata branch. Chennai branch has two users 'X' and 'Y' with user order limits of Rs. 550 lakh and Rs. 500 lakh respectively. Kolkata branch has one user 'Z' with user order value limit of Rs. 550 lakh. The member applies for a new user at Kolkata. What is the maximum user order value that can be set for the new user? [ 3 Marks ]
(a) Not more than Rs. 950 lakh
(b) Zero
(c) unlimited
(d) Rs. 250 lakh


Q:41 Upfront margin rates applicable for all securities in Trade for Trade - segment
(TT) is ______. [ 2 Marks ]
(a) 50%
(b) 100 %
(c) 200%
(d) 150%


Q:42 Penalties are charged to members for _____________ [ 3 Marks ]
(a) failure to fulfil their funds obligations
(b) failure to fulfil their securities deliverable obligations
(c) Margin Shortages
(d) all of the above


Q:43 Rahul is supposed to receive Rs. 1,00,000 from Chandra after 3 years. If the interest rate is 8%, what is the present value of the amount due from Chandra? [ 2 Marks ]
(a) 71,686.34
(b) 79,383.22
(c) 81,232.25
(d) 91,444.9


Q:44 Institutional transactions are identified by the use of the ________ at the time
of order entry. [2 Marks ]
(a) user code
(b) user id
(c) participant code
(d) client id


Q:45 Two sell orders enter into the system and are unmatched :
1) 200 shares @ Rs. 72.75 at time 10:30 a.m.
2) 300 shares @ Rs. 72.70 at time 10:31 a.m.
Which order will get a priority for getting executed. [ 1 Mark ]
(a) Order no. 1.
(b) Order no. 2
(c) both will have equal priority
(d) none


Q:46 In NSCCL, a _______ is a clearing member but not a trading member.
[ 2 Marks ]
(a) self clearing member
(b) participant
(c) broker
(d) custodian


Q:47 What does ‘AUI’ indicate as a message code in 'Full Message window' in the
NEAT system? [ 1 Mark ]
(a) Auction Initiation Messages
(b) Auction User Interface messages
(c) All messages related to user interface
(d) All messages related to Auctions


Q:48 Two buy orders enter into the system and are unmatched :
1) 200 shares @ Rs. 72.75 at time 10:30 a.m.
2) 300 shares @ Rs. 72.80 at time 10:31 a.m.
Which order will get a priority for getting executed. [ 1 Mark ]
(a) Order no. 1.
(b) Order no. 2
(c) both will have equal priority
(d) none


Q:49 NSCCL becomes the legal counterparty to the net settlement obligations of every member. This principle is called ______. [ 1 Mark ]
(a) ‘notation’
(b) ‘settlement fullfillment’
(c) ‘novation'
(d) ‘obligation guarantee’


Q:50 The trading members can participate in the Exchange initiated auctions by entering orders as a ______. [ 2 Marks ]
(a) participant
(b) initiator
(c) solicitor
(d) none of the above


Q:51 One of the Custodial Trade Reports is the ___________ [ 1 Mark ]
(a) Client Obligation Report
(b) Custodial Trade Pending Confirmation
(c) Clearing Member Report
(d) None of the above


Q:52 If a client buys shares worth Rs. 1, 00,000 and sells shares worth Rs. 1,00,000 through a stock-broker, then the maximum brokerage payable is _______.
[ 3 Marks ]
(a) Rs. 4,000
(b) Rs. 5,000
(c) Rs. 2,000
(d) Rs. 6,000


Q:53 Which of the following do not issue securities in the primary market?
[ 1 Mark ]
(a) FIIs
(b) State Goverments
(c) Companies
(d) None of the above


Q:54 Auction Square Up Debit Statement
: This report gives details of unauctioned deliveries that are squared- up by the Exchange. True or False? [ 2 Marks ]
(a) True
(b) False


Q:55 A trading member shall be deemed guilty of un- businesslike conduct for any of the following or similar acts or omissions namely: [ 2 Marks ]
(a) if it transacts its own business or the business of its constituent in fictitious names
(b) If it makes a fictitious transaction
(c) circulates or causes to be circulated, any rumours;
(d) all of the above


Q:56 Mr. Desai has decided to deposit Rs. 200,000 in the bank annually. If the bank has a policy of continuous compounding and the prevailing interest rate is 8% how much would his deposit grow upto in 2 years? [ 2 Marks ]
(a) 434,141.15
(b) 413,502.54
(c) 485, 123.70
(d) 433,820.81


Q:57 Mr. Shah has decided to deposit Rs. 300,000 in the bank annually. If the bank has a policy of continuous compounding and the prevailing interest rate is 12%
how much would his deposit grow upto in 3 years? [ 2 Marks ]
(a) 1,234,146.15
(b) 1,113,502.54
(c) 1,085,123.70
(d) 1,083,467.63


Q:58 What does 'P' indicate as a status in the 'Auction Inquiry' screen in the NEAT system? [ 1 Mark ]
(a) Auction is pending and yet to begin.
(b) Auction is deleted.
(c) There is no such status indicator as 'P' in the Auction Inquiry screen.
(d) Auction is over.


Q:59 On Line Backup is a facility that the user can invoke to take a backup of all order and trade related information for the user. True or False. [ 2 Marks ]
(a) True
(b) False


Q:60 Security sigma means the _______ of the security computed as at the end of the
previous trading day. [ 2 Marks ]
(a) mean
(b) volatility
(c) impact cost
(d) none of the above


Answers :
30 (a) 50 (c)
31 (a) 51 (b)
32 (a) 52 (b)
33 (a) 53 (a)
34 (c) 54 (a)
35 (a) 55 (d)
36 (b) 56 (d)
37 (d) 57 (d)
38 (a) 58 (a)
39 (d) 59 (a)
40 (d) 60 (b)
41 (b)
42 (d)
43 (b)
44 (c)
45 (b)
46 (d)
47 (a)
48 (b)
49 (c)

NCFM DERIVATIVES PART 1


PRACTICE QUESTIONS
DERIVATIVES MARKET (DEALERS) MODULE

1.Swaps can be regarded as portfolios of ________. [ 1 Mark ]
(a) Future Contracts
(b) Option Contracts
(c) Call Options
(d) Forward Contracts
(e) I am not attempting the question

2.A stock is currently selling at Rs. 165. The put option at Rs. 163 strike price costs Rs.
3. What is the time value of the option? [ 1 Mark ]
(a) Rs. 3
(b) Rs. 2
(c) Rs. 1
(d) Rs. 1.50
(e) I am not attempting the question

3.LEAPS have a maturity of upto _________. [ 1 Mark ]
(a) one year
(b) three years
(c) ten years
(d) three months
(e) I am not attempting the question

4.What is the outstanding position on which initial margin will be levied if no proprietary
trading is done and the details of client trading are: one client buys 500 units @ 1260.
The second client buys 900 units @Rs.1255 and sells 1000 units @Rs.1260?[2 Marks ]
(a) 1900 units
(b) 2400 units
(c) 500 units
(d) 600 units
(e) I am not attempting the question

5.A payer swaption is an option to pay ______ and receive ______. [ 1 Mark ]
(a) floating, fixed
(b) interest, interest
(c) fixed, floating
(d) options, futures
(e) I am not attempting the question

6.Forward contracts are ________ contracts. [ 3 Marks ]
(a) Multilateral
(b) Tri -lateral
(c) Future
(d) Bilateral
(e) I am not attempting the question

7.You are the owner of a 5 million portfolio with a beta 1.0. You would like to insure
your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty
stands at 4000. Put options on the Nifty are available at three strike prices. Which
strike will give you the insurance you want? [ 2 Marks ]
(a) 3,870
(b) 3,840
(c) 3,600
(d) None of the above
(e) I am not attempting the question

8.A receiver swaption is an option to receive ______ and pay ______. [ 1 Mark ]
(a) fixed, floating
(b) floating, fixed
(c) interest, interest
(d) options, futures
(e) I am not attempting the question

9.The market impact cost on a trade of Rs. 4 million of the S&P CNX Nifty works out to
be about 0.06%. This means that if S&P CNX Nifty is at 4000, a sell order of that value
will go through at a price of Rs. _______. [ 1 Mark ]
(a) 3997.60
(b) 3996
(c) 3,999.50
(d) 3,995.50
(e) I am not attempting the q uestion

10.Ms. Shetty has sold 1000 calls on ABC Ltd. at a strike price of Rs. 885 for a premium
of Rs.27 per call on April 1. The closing price of equity shares of ABC Ltd. is Rs. 890 on
that day. If the call option is assigned against her on that day, what is her net
obligation on April 01? [ 2 Marks ]
(a) Pay-out of Rs.22,300
(b) Pay-in of Rs.22,000
(c) Pay-in of Rs.25,000
(d) Pay-out of Rs.22,000
(e) I am not attempting the question

11.BANK Nifty is a derivative contract on NSE ____________. True or False? [ 3 Marks ]
(a) True
(b) False
(c) I am not attempting the question

12.CNX IT is a derivatives contract on NSE. True or False? [ 3 Marks ]
(a) True
(b) False
(c) I am not attempting the question

13.Forward contracts on expira tion have to settled by __________. [ 3 Marks ]
(a) cash
(b) difference in price
(c) payment of margin
(d) delivery of the asset
(e) I am not attempting the question

14.On expiry the settlement price of a stock option contract is the _________.[ 2 Marks ]
(a) Closing futures price
(b) Closing stock price
(c) Closing options price
(d) None of the above
(e) I am not attempting the question

15.In an index fund, trading in the stocks comprising the fund, is required in response to
______. [ 1 Mark ]
(a) Favourable company specific news
(b) Poor company specific news
(c) Mergers
(d) Government policies
(e) I am not attempting the question

16.The market impact cost on a trade of Rs. 3 million of the S&P CNX Nifty works out to be about 0.04%. This means that if S&P CNX Nifty is at 4100, a sell order of that value will go through at a price of Rs. _______. [ 1 Mark ]
(a) 4098.35
(b) 4096
(c) 4093
(d) 4099.50
(e) I am not attempting the question

17.The following is an example of an order with time condition. [ 3 Marks ]
(a) Day order
(b) Stop Loss
(c) Limit
(d) All of the above
(e) I am not attempting the question

18.What is the outstanding position on which initial margin will be levied if no proprietary trading is d one and the details of client trading are: one client buys 1000 units @ 1260. The second client buys 1000 units @Rs.1255 and sells 1000 units @Rs.1260.?
[ 2 Marks ]
(a) 2000 units
(b) 3000 units
(c) 1000 units
(d) 4000 units
(e) I am not attempting the question

19.The beta of TELCO is 0.8. A person has a long TELCO position of Rs. 800,000 coupled with a short Nifty position of Rs. 600,000. Which of the following is TRUE? [ 1 Mark ]
(a) He is bearish on Nifty as well as on TELCO
(b) He has a complete hedge against fluctuations of Nifty
(c) He has a partial hedge against fluctuations of Nifty
(d) He is bullish on Nifty as well as on TELCO
(e) I am not attempting the question

20.Reliance Industries Ltd. does not have a Beta value. True or False? [ 2 Marks ]
(a) True
(b) False
(c) I am not attempting the question

21.Nifty consists of securities having _____ market capitalization stocks. [ 1 Mark ]
(a) large
(b) small
(c) medium
(d) large and small
(e) I am not attempting the question

22.The beta of ICICI Bank is 1.5. A person has a long position of Rs. 400,000 of ICICI
Bank. Which of the following gives a complete hedge?. [ 1 Mark ]
(a) SELL Rs. 600,000 of Nifty futures
(b) SELL Rs. 650,000 of Nifty futures
(c) SELL Rs. 700,00 0 of Nifty futures
(d) None of the above
(e) I am not attempting the question

23.On 15th January, Raju bought a January Nifty futures contract which cost him
Rs.334,500. For this he had to pay an initial margin of Rs.31,520 to his broker. Each
Nifty futures contract is for delivery of 100 Nifties. On 25th January, the index closed
at 3360. How much profit/loss did he make? [ 2 Marks ]
(a) (- ) 1,200
(b) ( -) 1,500
(c) (+) 1,200
(d) (+) 1,500
(e) I am not attempting the question

24.Futures have a _______ payo ff. [ 2 Marks ]
(a) Non-linear
(b) Linear
(c) Vertical
(d) Horizontal
(e) I am not attempting the question

25.Mr. A buys a futures contract of M/s. XYZ Ltd. (Lot Size: 1000) expiring on Sep 29th for Rs. 300. The spot price of the share is Rs. 2 90. Does he have to pay securities
transaction tax? [ 1 Mark ]
(a) Yes, only if he buys more than 1 contract
(b) Yes
(c) No, only if he sells of the contract immediately
(d) No
(e) I am not attempting the question

26.Ms. Shetty has sold 5000 calls on ABC Ltd. at a strike price of Rs. 500 for a premium
of Rs.25 per call on April 1. The closing price of equity shares of ABC Ltd. is Rs. 505 on
that day. If the call option is assigned against her on that day, what is her net
obligation on April 01? [ 2 Marks ]
(a) Pay-out of Rs.1,22,300
(b) Pay-in of Rs.1,22,000
(c) Pay-in of Rs.1,25,000
(d) Pay-out of Rs.1,00,000
(e) I am not attempting the question

27.An index put option at a strike of Rs. 4200 is selling at a premium of Rs. 30. At what
index level will it break even for the buyer of the option? [ 1 Mark ]
(a) Rs. 4175
(b) Rs. 4176
(c) Rs. 4170
(d) Rs. 4162
(e) I am not attempting the question

28.Which of the following is the duty of the trading member? [ 3 Marks ]
(a) Giving tips to clients to buy and sell
(b) Funding losses of the clients
(c) Collection of adequate margins from the client
(d) All of the above
(e) I am not attempting the question

29.The only way an investor can manage risks in the un derlying cash market is by?
[ 1 Mark ]
(a) Hedging in the futures market
(b) Speculating in the futures market
(c) Speculating in the options market
(d) All of the above
(e) I am not attempting the question

30.Nifty is a ________ index [ 2 Marks ]
(a) well diversified
(b) poorly diversified
(c) balanced
(d) volatile
(e) I am not attempting the question



Answers :
1 (d) 21 (a)
2 (a) 22 (a)
3 (b) 23 (d)
4 (d) 24 (b)
5 (c) 25 (d)
6 (d) 26 (d)
7 (c) 27 (c)
8 (a) 28 (c)
9 (a) 29 (a)
10 (d) 30 (a)
11 (a)
12 (a)
13 (d)
14 (b)
15 (c)
16 (a)
17 (a)
18 (c)
19 (c)
20 (b)

NCFM DERIVATIVES PART 2

31.You have bought a stock on the exchange. To eliminate the risk arisin g out of the
stock price, you should _____. [ 3 Marks ]
(a) buy index futures
(b) buy stock futures
(c) sell the stock futures
(d) none of the above
(e) I am not attempting the question

32.On 1st January, a three month call option on the Nifty with a strike of 4280 is
available for trading. The `T’ that is used in the Black Scholes formula should be
_______. [ 1 Mark ]
(a) 3
(b) 0.25
(c) 90
(d) None of the above
(e) I am not attempting the question

33.The spot price of ABC Ltd. is Rs. 2000 and the cost of financing is 10%. What is the
fair price of a one month futures contract on ABC Ltd.? [ 2 Marks ]
(a) 2015
(b) 2016.75
(c) 2018.75
(d) 2019
(e) I am not attempting the question

34.Cyrus is short 800 WIPRO July Puts at strike Rs. 1520 for a premium of Rs. 43 each on July 22. On July 25, (the expiration day of the contract), the spot price of WIPRO
closes at Rs.1553, while the July futures on WIPRO close at 1655. Does Cyrus have an
obligation to the Clearing Corporation on his positions, and how much, if any?
[ 2 Marks ]
(a) Yes. Rs.19,800 pay-out
(b) No pay in or pay-out on expiration of contract
(c) Yes. Rs.18,900 pay-out
(d) Yes. Rs.19,800 pay-in
(e) I am not attempting the question

35.On 15th October, Arvind bought a December Nifty futures contract which cost him Rs.325,600. For this he had to pay an initial margin of Rs. 30,100 to his broker. Each
Nifty futures contract is for delivery of 100 Nifties. On 27th December, the index
closed at 3280. How much profit/loss did he make? [ 2 Marks ]
(a) (+) 1400
(b) ( -) 2400
(c) (+) 2400
(d) ( -) 1400
(e) I am not attempting the question

36.Assume that the base value o f a market capitalization weighted index were 1000 and
the base market capitalisation were Rs.70,000 crore. If the current market
capitalisation is Rs.140,000 crore, the index is at Rs. ____. [ 1 Mark ]
(a) 2,110
(b) 2,350
(c) 2,250
(d) 2,000
(e) I am not attempting the question

37.On 1st January, a one month call option on the Nifty with a strike of 4250 is available
for trading. The `T’ that is used in the Black Scholes formula should be _______.
[ 1 Mark ]
(a) 2
(b) 0.08
(c) 20
(d) None of the above
(e) I am not attempting the question

38.If the annual risk free rate is 9%, then the ‘r' used in the Black Scholes formula should
be ______. [ 1 Mark ]
(a) 0.086
(b) 0.099
(c) 1.1
(d) None of the above
(e) I am not attempting the question

39.The beta of ACC is 1.5. A person has a long TELCO position of Rs. 900,000 coupled
with a short nifty position of Rs. 800,000. Which of the following is TRUE? [ 1 Mark ]
(a) He is bearish on Nifty as well as on ACC
(b) He has a complete hedge against fluctuations of Nifty
(c) He has a partial hedge against fluctuations of Nifty
(d) He is bullish on Nifty as well as on ACC
(e) I am not attempting the question

40.If the annual risk free rate is 8%, then the ‘r' used in the Black Scholes formula should
be ______. [ 1 Mark ]
(a) 0.076
(b) 0.096
(c) 1.1
(d) None of the above
(e) I am not attempting the question

41.Hedging with stock futures means ___________. [ 1 Mark ]
(a) shorting stocks
(b) shorting index futures
(c) shorting stock futures
(d) long index futures
(e) I am not attempting the question

42.Which of the following is the duty of the trading member? [ 3 Marks ]
(a) Employing large numbers of research analysts
(b) Executing his own orders prior to client orders
(c) Bringing risk factors to the knowledge of client
(d) None of the above
(e) I am not attempting the question

43.On expiry, the settlement price of a Reliance Industries Ltd. futures contract is
_______. [ 2 Marks ]
(a) opening price of Reliance Industries Ltd.
(b) closing price of Reliance Industries Ltd.
(c) closing price of Reliance Industries Ltd. futures contract
(d) Last traded price of Reliance Industries Ltd.
(e) I am not attemp ting the question

44.On 1st January, a two month call option on the Nifty with a strike of 4250 is available
for trading. The `T’ that is used in the Black Scholes formula should be _______.
[ 1 Mark ]
(a) 3
(b) 0.16
(c) 90
(d) None of the above
(e) I am not attempting the question

45.The NEAT F&O trading system _____________. [ 3 Marks ]
(a) allows spread trades
(b) allows combination trades
(c) allows only a single order placement at a time
(d) (a) and (b) above
(e) I am not attempting the question

46.Santosh is bearish about ABC Ltd. and sells 10 one -month ABC Ltd. futures contracts
at Rs.3,96,000. On the last Thursday of the month, ABC Ltd. closes at Rs.410. He
makes a _________. (assume one lot = 100) [ 1 Mark ]
(a) profit of Rs. 14,000
(b) loss of Rs. 14,000
(c) profit of Rs. 28,000
(d) loss of Rs. 28,000
(e) I am not attempting the question

47.To be eligible for trading a broker must be _________. [ 1 Mark ]
(a) SEBI registered
(b) highly capitalised
(c) a member of the Association of Trading members
(d) None of the above
(e) I am not attempting the question

48.You are the owner of a 4 million portfolio with a beta 1.0. You would like to insure
your portfolio against a fall in the index of magnitude higher than 12%. Spot Nifty
stands at 4200. Put options on the Nifty are available at three strike prices. Which
strike will give you the insurance you want? [ 2 Marks ]
(a) 3,870
(b) 3,840
(c) 3,696
(d) None of the above
(e) I am not attempting the question

49.A stock is currently selling at Rs. 50. The call option to buy the stock at Rs.45 costs
Rs.9. What is the time value of the optio n? [ 1 Mark ]
(a) Rs. 9
(b) Rs. 7
(c) Rs. 4
(d) Rs. 2
(e) I am not attempting the question

50.An option contract which will not be exercised on the expiry date is ________.
[ 2 Marks ]
(a) an in -the-money option
(b) a deep in-the-money
(c) an out-of-the-money option
(d) None of the above
(e) I am not attempting the question

51.The theoretical futures price is based on the ________. [ 2 Marks ]
(a) strike price
(b) underlying spot price
(c) the price at which a futures contract trades in the market
(d) the price set by the exchange
(e) I am not attempting the question

52.On 1st January, a two month call option on the Nifty with a strike of 4000 is available
for trading. The `T’ that is used in the Black Scholes formula should be _______.
[ 1 Mark ]
(a) 2
(b) 0.16
(c) 20
(d) None of the above
(e) I am not attempting the question

53.Stock options on HDFC Bank Ltd. can be exercised ___________. [ 2 Marks ]
(a) any time on or before maturity
(b) upon maturity
(c) any time upto maturity
(d) on a date pre-specified by the trading member
(e) I am not attempting the question

54.Ms. Shetty has sold 1400 calls on HLL at a strike price of Rs.297 for a premium of
Rs.11 per call on April 1. The closing price of equity shares of HLL is Rs. 300 on that
day. If the call option is assigned against her on that day, what is her net obligation on
April 01. [ 2 Marks ]
(a) Pay-out of Rs.12,300
(b) Pay-in of Rs.12,000
(c) Pay-in of Rs.11,000
(d) Pay-out of Rs.11,200
(e) I am not attempting the question

55._____________is allowed to clear trades of themselves but not of others. [ 1 Mark ]
(a) Trading member - clearing member
(b) Trading members are not allowed to clear their own trades
(c) professional clearing member
(d) self clearing member
(e) I am not attempting the question

56.Index Funds use index futures to reduce _________ [ 2 Marks ]
(a) tracking error
(b) expenses
(c) time to invest in the markets
(d) All of the above
(e) I am not attempting the question

57.Weekly options trading commenced on NSE in _______. [ 1 Mark ]
(a) 02-Jun-2005
(b) 04-Jul-2005
(c) NSE does not trade in Weekly options
(d) 04-Jun-2005
(e) I am not attempting the question

58.The market impact cost on a trade of Rs. 5 million of the S&P CNX Nifty works out to be about 0.05%. This means that if S&P CNX Nifty is at 4200, a buy order of that
value will go through at a price of Rs. _______. [ 1 Mark ]
(a) 4202.10
(b) 4200
(c) 4210
(d) 4211
(e) I am not attempting the question

59.What is the outstanding position on which initial margin will be levied if no proprietary trading is done and the details of client trading are: one client buys 2000 units @1260. The second client buys 2000 units @Rs.1255 and sells 1000 units @Rs.1260.?
[ 2 Marks ]
(a) 4000 units
(b) 5000 units
(c) 3000 units
(d) None of the above
(e) I am not attempting the question

60. In the F&O segment of NSEIL, obligations of client's positions are calculated on a
________ basis. [ 2 Marks ]
(a) cumulative
(b) gross
(c) net
(d) portfolio
(e) I am not attempting the question




31 (c) 51 (b)
32 (b) 52 (b)
33 (b) 53 (a)
34 (b) 54 (d)
35 (c) 55 (d)
36 (d) 56 (a)
37 (b) 57 (c)
38 (a) 58 (a)
39 (c) 59 (c)
40 (a) 60 (c)

41 (c)
42 (c)
43 (b)
44 (b)
45 (d)
46 (b)
47 (a)
48 (c)
49 (c)
50 (c)

Sunday, November 14, 2010

Nobel Prize for Economics

This year’s Laureate trio has formulated a theoretical framework for search markets.

While Peter Diamond of the Massachusetts Institute of Technology analysed the foundations of search markets, Dale Mortensen of Northwestern University and Christopher Pissarides of the London School of Economics expanded the theory and applied it to the labour market.

Their models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy.

Diamond-Mortensen-Pissarides model

One general conclusion arising from their work is that more generous government unemployment benefits(GUB) (berojgari bhatta) give rise to higher unemployment (UE) and longer search duration of jobs(person going to search job ) abbreviated as SD .

GUB proportional to UE and SD

Generous unemployment benefits have the effect of raising the individual’s reservation wage(RW) (the lowest wage at which he/she would be willing to accept a new job).

GUB proportional to RW

The reservation wage is also a declining function of time spent in unemployment(TUE)( total time person remained unemployed).

RW inversely proportional to TUE

A high marginal tax rate, on the other hand, creates disincentives to work and earn. Means a person will less likely to work if marginal tax rate are higher.

In general, all else constant, the higher the unemployment rate, the poorer a region, and the longer the duration of search for a job, the individual’s reservation wage will be lower.

Hence, if we define the net benefit (or the economic rent) from a job to be equal to the wages paid minus the reservation wage, net benefits from jobs created in poorer regions will be higher.

Economic benefit = wages – reservation wages

In fact, relatively lower reservation wages in India and other Asian countries such as China and the Philippines (compared to the West) explain why jobs are outsourced (or ‘Bangalored’) from the US and Europe.