35 Questions
What has led to the reduction of transaction costs in the derivatives market?
Use of latest technology in communications
What has driven the growth of financial derivatives market?
Increased fluctuations in underlying asset prices, integration of financial markets globally, and other factors
What has enabled market participants to manage risk more effectively?
Enhanced understanding of market participants on sophisticated risk management tools
What has been the result of the growth of the derivatives market over the last five decades?
A phenomenal growth in the derivatives market
What has facilitated the integration of financial markets globally?
Use of latest technology in communications
What is a derivative based on?
The value of some other asset
What is the underlying asset in a derivative contract?
Any commodity or financial asset
What is the significance of the derivatives market?
It provides a platform for risk management
What are some of the risks associated with derivatives trading?
Increased volatility
What is the history of derivatives mapped back to?
Several centuries
What is the primary objective of NISM Certification programs?
To enhance the quality and standards of professionals employed in the financial services sector
What are some examples of agri commodities that can be underlying assets?
Wheat, Sugar, Coffee, and Cotton
What is the primary focus of NISM’s School for Certification of Intermediaries (SCI)?
Developing and conducting certification examinations and Continuing Professional Education (CPE) programs
What is the outcome of NISM certification examinations and training programs?
Providing a structured learning plan and career path to students and job aspirants
What is the significance of NISM Certifications?
Establishing knowledge benchmarks for various market products and functions
What is the purpose of the workbooks provided by NISM?
To assist candidates in understanding the subject and preparing for NISM Examinations
How many individuals have been certified by NISM through its Certification Examinations and CPE Programs as of March 2023?
17 lakh individuals
Which year did the Chicago Board Options Exchange introduce options on stock indices?
1983
What was the main recommendation of the committee set up by SEBI in 1996?
To declare derivatives as securities
What was the first stock index futures launched in 1982?
The Kansas City Board of Trade Index
What was introduced by CME in 1982?
Eurodollar futures contract
What is one of the factors driving the growth of financial derivatives?
Increased integration of financial markets globally
Who chaired the committee set up by SEBI in 1996?
Dr. L.C. Gupta
What is the underlying asset of the Nifty futures contract in the example?
Nifty 50 index
What is the purpose of the contract multiplier in futures contracts?
To calculate the contract value
What is the value of the underlying price of the Nifty 50 index on May 10, 2023?
18315.10
What is the total number of contracts traded in the Nifty futures contract as on May 10, 2023?
47,56,000
What is the high price of the Nifty futures contract as on May 10, 2023?
18358.50
Why can the contract size be changed by the exchange from time to time?
Due to changes in the index level and stock prices
In a crisis, what happens to the demand for essential commodities like grains and energy products?
It increases due to hoarding behavior.
What is convenience yield?
The return from holding an asset for convenience.
Why may futures trade at a discount to the cash market?
When convenience yield dominates the cost of carry.
What is a necessary condition for convenience yield to arise?
Scarcity of a commodity.
Why does reverse arbitrage become impossible in certain situations?
Because no one lends traders the assets to sell short in the cash market.
What happens to the cash and carry model in certain situations?
It breaks down and cannot be applied.
Test your knowledge of the factors that have contributed to the rapid growth of the global derivatives market over the past five decades. From fluctuations in asset prices to technological advancements, see how well you understand the drivers of this market. Quiz yourself now!
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