FINANCIAL MAREKETS MANAGEMENT (805)

Financial Markets Management- SAMPLE PAPER

Class 12th
Max. Time: 3 Hours Max. Marks: 60
Q. 1 Answer any 4 out of the given 6 questions on Employability Skills (1 x 4 = 4 marks)
i. Which of the following is not a part of the various stages of active listening? 1
(a) receiving
(b) understanding
(c) disappearing
(d) remembering
ii. It arises because of incentives or external rewards: 1
(a) intrinsic motivation
(b) explicit motivation
(c) implicit motivation
(d) extrinsic motivation
iii. ___________ helps us to understand what we want, how to achieve it, and how we 1
measure our success.
(a) achievement
(b) enjoyment
(c) goal setting
(d) promotion
iv. Whatever you type in a cell appears in the area called ___________. 1
(a) bar code
(b) formula bar
(c) formula
(d) coding
v. Which of the following is not a quality of a successful entrepreneur? 1
(a) initiative
(b) ability to learn from experience
(c) motivation
(d) introvert
vi. To address the skilled workforce issues associated with sustainable development, the 1
Ministry of Skill Development and Entrepreneurship has set up the ____________.
(a) skill for green jobs
(b) skill council for jobs
(c) skill council for green jobs
(d) council for Green Jobs

Q. 2 Answer any 5 out of the given 7 questions (1 x 5 = 5 marks)

i. What are the two interdependent and inseparable segments of the securities market? 1
ii. How is market capitalization of the equity calculated? 1
iii. Which rolling settlement is followed from 2003 onwards? 1
(a) t +2
(b) t +3
(c) t +1
(d) t +0

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 iv. What is the name of the index which measures the market’s expectation of volatility over 1
the near term?
(a) volatility
(b) index
(c) volatile index
(d) India vix
v. Who can become an Authorized Person in the Stock Market? 1
vi. Who works under the broker as an affiliated entity from the stock exchange? 1
(a) trading member
(b) sub-broker
(c) underwriter
(d) institutional Investor
vii. What is Arbitration? 1

Q. 3 Answer any 6 out of the given 7 questions (1 x 6 = 6 marks)

i. Define Open Book of Trading Terminal. 1
ii. What is the regular lot size in the normal equity market? 1
(a) one share
(b) two shares
(c) three shares
(d) four shares
iii. For how much time do the block deal sessions open in the normal market? 1
(a) 31 minutes
(b) 33 minutes
(c) 35 minutes
(d) 37 minutes
iv. What is the purpose of the outstanding order window? 1
v. What does ‘F’ stand for on the auction inquiry screen? 1
(A) F - Auction is going on
(B) F - Auction is started
(C) F - Auction is over
(D) F - Auction is deleted
vi. What is Trigger Price? 1
vii. Who launched the Wireless Application Protocol (WAP) in November 2000? 1
(a) nse–it
(b) bse–it
(c) mcx–it
(d) ise–it

Q. 4 Answer any 5 out of the given 6 questions (1 x 5 = 5 marks)

i. The process of delivering securities to the Clearing Corporation to effect settlement of a 1
sale transaction is called:
(a) funds pay-out
(b) securities pay-in
(c) securities pay-out
(d) securities and fund receiving
ii. ____________ is an entity where the securities of an investor are held in electronic form. 1
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 (a) Nsccl
(b) a depository
(c) stock exchange
(d) NSE–it
iii. What objection arises when documents for securities transfer are returned due to signature 1
mismatch or for any other reason?
iv. Which of the following is not a system risk? 1
(a) operational risks
(b) legal risks
(c) systemic risks
(d) replacement cost risk
v. What are Group II Securities? 1
(a) less liquid securities
(b) more liquid securities
(c) illiquid securities
(d) no liquid securities
vi. Which type of margin in a loss position is being calculated by marking each transaction in 1
security to the closing price of the security at the end of trading?

Q. 5 Answer any 5 out of the given 6 questions (1 x 5 = 5 marks)

i. Define insider trading. 1
ii. ___________ means that the interest will include interest calculated on interest. 1
(a) compound interest
(b) less interest
(c) more interest
(d) simple interest
iii. How is the time value of money computed in case of a single cash flow of discrete 1
compounding?
iv. To seek information on its current operations, managerial capabilities, growth plans, its 1
past performance is known as ____________ Analysis.
(a) corporate
(b) company
(c) industry
(d) financial
v. What is meant by average inventory? 1
vi. ___________ measures the profit available to the equity shareholders per share, that is, the 1
amount that they can get on every share held.
(a) EPS (earnings per share)
(b) PE (price earning) ratio
(c) Current Ratio
(d) Liquid Ratio

Q. 6 Answer any 5 out of the given 6 questions (1 x 5 = 5 marks)

i. These entail swapping only the interest related cash flows between the parties in the same 1
currency:
(a) currency swap
(b) dollar swap
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 (c) rupee swap
(d) interest rate swap
ii. Which of the following is not a feature of forward contract? 1
(a) bilateral
(b) illiquid
(c) customized
(d) standardized
iii. Write the formula of future pricing. 1
iv. An investor bought 125 shares of ABC ltd. @ ₹3000 per share. to hedge, the investor needs 1
to sell ABC ltd. by ____________ if beta is 1.1
(a) ₹4,12,500
(b) ₹4,13,500
(c) ₹4,70,000
(d) ₹4,80,000
v. What is meant by systematic risk and how can it be minimized? 1
vi. In call option, spot price < strike price will be considered as _________ option contract. 1
(a) in the money
(b) at the money
(c) out of the money
(d) above the money

SECTION B: SUBJECTIVE TYPE QUESTIONS

Answer any 3 out of the given 5 questions on Employability Skills (2 x 3 = 6 marks) Answer each question
in 20 – 30 words
Q. 7 How can distraction be avoided in active listening? 2
Q. 8 What is Stress and how can it be managed? 2
Q. 9 What is Active cell and Cell range? 2
Q. 10 What is meant by Technical Entrepreneurs? 2
Q. 11 Write any four benefits of Green Jobs. 2

Answer any 3 out of the given 5 questions in 20 – 30 words each (2 x 3 = 6 marks)

Q. 12 Write any two features of Temporary Sign-off. 2
Q. 13 What do you know of Principal Risk in counterparty risk? 2
Q. 14 What is meant by Annual Report and what does it show? 2
Q. 15 Differentiate between American option and European option. 2
Q. 16 There are two types of risk measures in derivatives, name them. How can these risks be 2
minimized?

Answer any 2 out of the given 3 questions in 30– 50 words each (3 x 2 = 6 marks)
Q. 17 A trading member can suspend his business in part or in whole under certain conditions. 3
Describe these conditions.
Q. 18 What is the trading system users’ hierarchy? Explain. 3
Q. 19 How are securities identified through International Securities Identification Number? 3
Explain ISIN alphanumeric series.

Answer any 3 out of the given 5 questions in 50– 80 words each (4 x 3 = 12 marks)
Q. 20 Membership can be taken for any segment individually or in combination. Give a brief of 4
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 each category of membership.
Q. 21 The system allows the trading members to enter orders with various conditions attached to 4
them as per their requirements. These conditions are broadly divided into Time Conditions,
Quantity Conditions, Price Conditions, and Other Conditions. Several combinations of the
above are allowed thereby providing enormous flexibility to the users. Give a brief of each
order condition of NEAT
Q. 22 Explain SEBI (Prohibition of Insider Trading) Regulations, 2015. 4
Q. 23 What is impact cost? Calculate the impact cost of the best 1000 shares from the following 4
quantity. Give your comments also.
Buy Qty. Buy Price (₹) Sell Price (₹) Sell Qty.
1000 90.00 91.00 2500
480 89.75 91.20 850
3800 89.50 91.35 254
750 89.25 91.50 365
280 89.10 91.65 562
Q. 24 ‘Futures are popularly used as a risk management tool in companies, banks, public 4
departments, and by investors. They are also used for speculation and making profits out of
market movements. There are various strategies which can be adopted for achieving these
objectives’. In the light of this statement, describe Hedging ‘Long security, sell future’ or
Speculation ‘Bullish security, buy future’. Give suitable examples

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