Name of the University : IGNOU The People’s University
Department : Financial Markets Practice
Degree : Post Graduate Diploma in Financial Markets Practice
Subject Code/Name : MFP-1 Equity Market
Year : 2016
Document Type : Question Paper
Website : https://webservices.ignou.ac.in/Pre-Question/Question%20Paper%20June%202016/soms/soms.htm#soms1
Download Model/Sample Question Paper :
Equity Market : https://www.pdfquestion.in/uploads/11555-MFPequity.pdf
Equity Derivatives : https://www.pdfquestion.in/uploads/11555-MFPderivatives.pdf
Commodity Markets : https://www.pdfquestion.in/uploads/11555-MFPcommodity.pdf
Currency and Debt Markets : https://www.pdfquestion.in/uploads/11555-MFPcurrency.pdf
Financial Market Practice : https://www.pdfquestion.in/uploads/11555-MFPmarket.pdf
Post Graduate Diploma in Financial Markets Practice :
Equity Markets :
Time : 3 hours
Maximum Marks : 100
Note :
(i) Attempt any five questions.
(ii) All questions carry equal marks.
Related :IGNOU PG Diploma International Business Operations Question Paper : www.pdfquestion.in/11549.html
1. How are the investors classified on the basis of their risk taking capacity ? Discuss the different types of risks that exist in financial markets.
2. Explain the meaning and significance of Green Shoe Option. Describe the role of a ‘market maker in the working of a green shoe option. Discuss the procedure for allotment and stabilisation as adopted by the market maker.
3. What is Arbitration ? List down the documents that need to be enclosed with Arbitration Application. What are the Do’s and Don’ts that investors should bear in mind ?
4. What do you understand by Dematerialisation of securities ? Describe the various entities involved in dematerialisation. What are the benefits of dematerialisation ?
5. With the help of a suitable example explain how the value per share can be calculated using the Free Cash Flow to the Firm (FCFF) method.
6. Define preference shares and why are they issued ? Describe their salient features. What are the different types of preference shares issued by companies ? How are preference shares distinct from equity shares ?
7. What are the reasons behind evolving investment styles ? Discuss the most commonly employed styles by investors.
8. Write short notes on any four of the following :
(a) Bonds
(b) Differential pricing of securities
(c) Reserves and surplus
(d) Continuous compounding
(e) Stock lending
Equity Derivatives :
1. What are ‘Swaps’? Explain their main characteristics. Discuss the Plain Vanilla Interest Rate Swaps with the help of a suitable example.
2. Write short notes on the following :
(a) Contango
(b) Backwardation
(c) Cash and Carry Arbitrage
(d) Reverse Cash and Carry Arbitrage.
3. What do you mean by ‘Call option’ and ‘Put option’ ? Discuss the different forms of settlement of these options with the help of suitable examples.
4. a. What is a ‘Bonus Issue’ ? How is Stock Price calculated when a bonus issue takes place ?
b. Discuss the adjustments for derivative contracts when a company announced bonus issue. –
5. What do you mean by ‘ATM’, ‘ITM’ and ‘OTM’ options ? Explain, with suitable examples, which one of these option strikes would you like and why.
6. Briefly explain the following option strategies for speculation :
(a) Bull spread using calls
(b) Bull spread using puts
(c) Long Butterfly
(d) Short Butterfly
7. a. “Derivative markets create their own specialised market indicators which serve to help traders to understand how market players are behaving.”
b. Discuss this statement bringing out the basic market indicators.
8. Discuss how is accounting of Futures done as per Indian Accounting System and the International Accounting. Give examples.
Commodity Markets :
1. What are commodity markets ? Discuss the benefits of trading in commodity markets.
2. Describe the regulatory framework for future delivery in commodity markets in India and discuss the statutory functions of Forward Market Commission.
3. Explain the various measures adopted by the Commodity Exchanges for the purpose of the Exchange Risk Management.
4. Explain the ‘Delivery and Settlement’ procedure for commodity trades on exchange.
5. What are the important base metals traded internationally on commodity exchanges ? Write a short note on any two base metals.
6. What is ‘Emissions Trading ‘ ? Discuss the use of futures on carbon credits for mitigating risk of increasing costs in control of pollution.
7. Explain the concept of convenience field and the theory of storage.
8. How are commodity futures contracts priced ? What is the meaning of cost of carry, contango and backwardation ?
Currency And Debt Markets :
1. What are the features of foreign exchange markets and how do they compare with other financial markets ?
2. Discuss the various theories of Exchange Rate Determination and elaborate on the major factors that influence currency volatility.
3. What are Forward Rate Agreements (FRA) ? Explain how FRA can be used to hedge currency risk.
4. Explain the following :
(a) Delta Hedging
(b) Black Scholes Model
5. What is Money Market ? Describe the different types of money market instruments and briefly discuss the guidelines for the issuance of commercial paper.
6. What are Government Securities ? Discuss the different types of government securities and explain their distinguishing features.
7. What is interest rate risk ? Explain the interest rate sensitivity policy and discuss its broad parameters.
8. What is meant by ‘Duration of a bond ? How is the duration and modified duration of a bond calculated ?