Unit-I(As per parameter).pptx management in progress

Mba program notes in niet

1. Noida Institute of Engineering and Technology, Greater Noida Introduction to derivatives market Faculty Name Dr. Mohd Iftikhar Baig Assistant professor Department-MBA 3/16/2023 1 Unit: I Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I Subject Name: Financial Derivatives & Risk management Course Details (MBA 4 th Sem.)

2. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 2 Index/Content S. No. Index 1. Name of Subject with code, Course and Subject Teacher 2. Brief Introduction of Faculty member with Photograph 3. Evaluation Scheme 4. Syllabus 5. Branch wise Application 6. Course Objective(s) 7. Course Outcome(s) 8. Program Outcomes (PSOs) 9. Cos and POs Mapping

3. S. No. Index 10. Program Specific Outcomes (PSOs) 11. Cos and PSOs Mapping 12. Program Educational Objectives (PEOs) 13. Result Analysis 14. End Semester Question paper Templates 15. Pre-requisite/Recap 16. Brief Introduction about the Subject with Videos 17. Unit Contents 18. Unit Objectives 19. Topic Objectives/Topic Outcome 3 Index/Content 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

4. S. No. Index 20. Lecture related to topic 21. Daily Quiz 22. Weekly Assignment 23. Topic Links 24. MCQs 25. Glossary Questions 26. Old question papers 27. Expected Questions 28. Recap of unit 4 Index/Content 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

5. Faculty Profile Dr. Mohd Iftikhar Baig Assistant professor Department-Management Studies Email-Id: iftikhar.baig @niet.co.in Qualification: Ph.D in Finance, MBA & B.Com Specialization: Finance Total Teaching Experience: 2 Years Teaching Area: Accounting & Finance 3/16/2023 5 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

6. Scheme 3/16/2023 6 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

7. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 7 Syllabus UNIT I: Introduction to Financial Derivatives (8 Hours) Definition, Evolution and features of Derivatives, Types of Derivatives, Forward , futures and options market, Forward market transactions , Forward contracts , Forward market in India , Hedging with forwards. UNITII: Forwards Contracts and Futures Contracts (8 Hours) Forward Contract, features of forward contracts Futures contract , types , functions , distinction between futures and forward , pricing of futures contract, Currency Futures , Hedging in Currency Futures , Speculation and Arbitrage in Currency Futures , Pricing of Futures, Cost of Carry Model , Application of Market Index , Index Futures in the Stock Market , Indian Derivatives Market.

8. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 8 Syllabus UNIT III: Introduction to Options (8 Hours) Hedging with Currency Options , Speculation and Arbitrage with Options ,Pricing Options , General Principles of Pricing , Black Scholes option pricing Model Index Options , Hedging with Index Options, Speculation and Arbitrage with Index Options, Index Options Market in Indian Stock Market , Use of different option strategies to mitigate the risk. UNIT IV: Financial Swaps (8 Hours) Financial Swaps, Managing Interest Rate Exposure, Interest Rate Swaps, Currency Swaps Interest Rate Futures, Forward Rate Agreements.

9. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 9 Syllabus UNIT V: Risk Management (8 Hour) Risk Management: Definition, meaning and measurement of Risk- Classification of Risk- diversification- Statistical tools used in risk management - techniques of risk mitigation

10. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 10 Branch wise Applications This course will help- To ensures proper use of fund. Business firm to take financial decisions. To prepare guidelines for earning maximum profits with minimum cost. To increases shareholders' wealth.

11. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 11 Course Objectives Objective of this course is To aware the students of different types of Derivatives. To develop an understanding amongst students of financial derivatives and associated regulatory framework. To have an understanding of the derivative tools such as options, futures and their application to hedging. To understand the concept of financial swaps To understand the concept of risk management

12. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 12 Course Outcomes S.No CO After completion of this course students will be able to B.T 1 CO1 Understand how derivative securities work and how they are traded. Knowledge (K2) 2 CO2 Understand the principles of derivatives pricing, including the implications of arbitrage. Evaluating(K7) 3 CO3 Be able to know the price forward and futures contracts using the cost of carry model. Synthesizing(K6) 4 CO4 Be able to value options using the binomial and Black-Scholes option pricing models. Applying (K4) 5 CO5 Be prepared to use futures and options in financial risk management, speculation and arbitrage, interest future and forward rate agreement. Synthesizing (K6)

13. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 13 Program Outcomes Apply knowledge of management theories and practices to solve business problems. Foster analytical and critical thinking abilities for data-based decision making. Ability to develop value based leadership ability. Ability to understand, analyze and communicate global, economic, legal and ethical aspects of business. Ability to lead themselves and others in the achievement of organizational goals, contributing effectively to a team environment.

14. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 14 CO-PO Mapping PO CO PO1 PO2 PO3 PO3 PO4 PO5 CO1 3 3 2 CO2 3 2 CO3 2 2 CO4 3 2 2 CO5 2 3 2 Average 3 2.5 2 2 2.5 2

15. Not Applicable 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 15 PSOs

16. Not Applicable 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 16 COs-PSOs Mapping

17. PEO 1: Graduates of the Management program will have conceptual knowledge, to adapt to the rapidity changing environment, learn new skills and demonstrate application of management principles in a professional work setting. PEO 2: Graduates will apply appropriate tools for decision making required for solving complex managerial problems in the local global context. PEO 3: Graduates of the Management program will exhibit integrity, social responsibility and teamwork. PEO 4: Graduates will exhibit ethics, communication skills, leadership qualities and entrepreneurial mindset using creativity and innovation. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 17 PEOs

18. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 18 Result Analysis Financial Derivatives & risk Management(AMBA FM0413) 2019-20 2020-21 2021-22 100% 100% NA

19. Will be display soon ……. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 19 End Semester Question Paper Template

20. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 20 End Semester Question Paper Template

21. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 21 End Semester Question Paper Template

22. Introduction to Finance Introduction to Financial Derivatives Introduction to Risk management 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 22 Pre-requisite and Recap

23. Introduction: Financial derivatives is the study of different theoretical and numerical components that are applied in the banking/finance based industries. Video Links: https://youtu.be/KuJkFqBWpl0 https://youtu.be/i_pLF9J3QPE https://youtu.be/DE4tfkKQFRA https://youtu.be/Km01GXVOo4g 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 23 Introduction of subject with video links

24. Introduction to derivatives market Evolution of derivatives market Types of Derivatives Forward market in India 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 24 Content

25. To make students aware of different types of Derivatives  To develop an understanding amongst students of financial derivatives and associated regulatory framework 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 25 Unit Objective(s)

26. Financial derivatives system in India Different types of theories of FD Various kinds of derivatives Structure of FD market in India 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 26 Prerequisite and Recap

27. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Introduction to Financial Derivatives CO1 CO3 High High 2 Instruments of Financial Derivatives CO1 CO3 High High 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 27 Topic Mapping with course outcomes

28. Students will be able to know the following concepts: Introduction to Financial Derivatives Instruments of Financial Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 28 Topic objectives

29. A derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying. OR “ A derivative is a financial instrument whose value depends on the value of other basic underlying variables ” 3/16/2023 29 Introduction Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

30. Some Underlying Assets Of Financial Derivatives: 1. Metals such as Gold, Silver, Aluminium, Copper, Zinc, Nickel, Tin, 2. Energy resources such as Oil and Gas, Coal, Electricity 3. Agri commodities such as wheat, Sugar, Coffee, Cotton, Pulses 4. Financial assets such as Shares, Bonds and Foreign Exchange. 3/16/2023 30 Underlying Assets Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I

31. • November 18, 1996 L.C. Gupta Committee set up to draft a policy framework for introducing derivatives • May 11, 1998 L.C. Gupta committee submits its report on the policy framework • May 25, 2000 SEBI allows exchanges to trade in index futures • June 12, 2000 Trading on Nifty futures commences on the NSE 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 31 Development of Indian derivative market

32. • June 4, 2001 Trading for Nifty options commences on the NSE • July 2, 2001 Trading on Stock options commences on the NSE • November 9, 2001 Trading on Stock futures commences on the NSE 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 32 Development of Indian derivative market

33. 1.The base year of BSE-30 sensitive Index (SENSEX) is : (a) 1978-79 = 100 (b) 1975-76 = 100 (c) 1985-86 = 100 (d) 1972-73 = 100 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SEBI. (b) The Stock Exchange . (c) SCRA (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 33 Daily Quiz

34. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. The closing index value of the BSE Sensitive Index for the day is calculated using: (a) last traded price of the index scripss. (b) weighted average of the last 30 minutes trades of the index scrips. (c) the algorithm used to calculated closing Sensex value. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 34 Daily Quiz

35. 5. For the derivatives exchange, the trading member’s net-worth shall be fixed by (a) SEBI. (b) The Stock Exchange . (c) SCRA (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 35 Daily Quiz

36. 6. Define derivatives. 7. Discuss L. C. Gupta committee. 8.Give some examples of financial derivatives products. 9. Give full form of NSE. 10. Define the concept “Underlying Asset” 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 36 Daily Quiz

37. We have covered the following topics in this lecture: Introduction to derivatives Underlying assets Development of Indian derivative market 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 37 Summary

38. Introduction to derivatives Underlying assets Development of Indian derivative market 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 38 Prerequisite and Recap

39. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Development of Indian derivative market CO1 CO3 High Medium 2 Indian Derivatives Market CO1 CO3 High Medium 3 Features of Derivatives CO1 High 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 39 Topic Mapping with course outcomes

40. Students will be able to know the following concepts: Development of Indian derivative market Indian Derivatives Market Features of Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 40 Objectives of topic/Session

41. • August 29, 2008 Currency derivatives trading commences on the NSE • August 31, 2009 Interest rate derivatives trading commences on the NSE • February 2010 Launch of Currency Futures on additional currency pairs • October 28, 2010 Introduction of European style Stock Options • October 29, 2010 Introduction of Currency Options 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 41 Development of Indian derivative market

42. • SEBI set up a 24–member committee under the Chairmanship of Dr. L. C. Gupta. • The committee submitted its report on March 17, 1998. • SEBI set up a group in June 1998 under the Chairmanship of Prof. J.R.Verma. • The committee submitted its report in October 1998. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 42 Indian Derivatives Market

43. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 43 Features of Derivatives Derivative are of three kinds future or forward contract, options and swaps and underlying assets can be foreign exchange, equity, commodities markets or financial bearing assets. As all transactions in derivatives takes place in future specific dates. Derivatives have standardized terms due to which it has low counterparty risk.

44. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 44 Features of Derivatives 3. When value of underlying assets change then value of derivatives also changes and hence one can construct portfolio which is needed by one and that too without having the underlying asset.

45. 1 . On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above 2. The greater the number of participant in any market, generally lower the liquidity. (a) True . (b) False. (c) True only for the year 2012. (d) True only for the year 2011. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 45 Daily Quiz

46. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. The area within the exchange where training was conducted through open outcry, is known as the Pit. (a) True. (b) False. (c) None of these. (d) Sometimes called. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 46 Daily Quiz

47. 5. An investor has an buy position in a scrip. He can make his position nil in the settlement by selling. (a) Any security of equal quantity. (b) The same scrip and same quantity. (c) Any index scrip of equal quantity. (d) Any A-group scrip for equal quantity. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 47 Daily Quiz

48. What is option? Which body regulates the Indian capital market? Which body regulates derivatives market? Discuss about foreign exchange. Define SWAP. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 48 Daily Quiz

49. We have covered the following topics in this lecture: Development of Indian derivative market Indian Derivatives Market Features of Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 49 Summary

50. Development of Indian derivative market Indian Derivatives Market Features of Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 50 Prerequisite and Recap

51. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Participants in the Derivatives Market CO1 High High 2 Types of Derivatives CO1 CO3 High Low 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 51 Topic Mapping with course outcomes

52. Students will be able to know the following concepts: Participants in the Derivatives Market 1. Hedger 2. Speculators 3. Arbitrageurs 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 52 Objectives of topic/Session

53. Hedgers 2. Speculators 3. Arbitrageurs 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 53 Participants in the Derivatives Market

54. Hedger: A hedger is someone who faces risk associated with price movement of an asset and who uses derivatives as means of reducing risk. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 54 Participants in the Derivatives Market

55. Definitions Long position: an asset which is purchased or owned Short position: an asset which must be delivered to a third party as a future date, or an asset which is borrowed and sold, but must be replaced in the future Hedging risk involves engaging in a financial transaction that offsets a long position by taking an additional short position, or offsets a short position by taking an additional long position. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 55 Participants in the Derivatives Market

56. Speculator Speculators use derivatives to bet on the future direction of the markets. Their objective is to gain when the prices move as per their expectation. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 56 Participants in the Derivatives Market

57. There are three types of Speculators based on duration: i. Scalpers – hold for very short time (in minutes) ii. Day Traders- one trading day iii. Position Traders- long period (week, month, a year) 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 57 Participants in the Derivatives Market

58. Arbitragers Arbitrageurs try to make risk-less profit by simultaneously entering in to transactions in two or more market. Arbitrageurs assist in proper price discovery and correct price abnormalities. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 58 Participants in the Derivatives Market

59. The selection criteria for a scrip to form part of the BSE Sensitive Index is : (a) The scrip must have been traded every day in the last six month. (b) The company must be a dividend paying company. (c) Number of trades in the six month should be greater than a certain number specified by the index Committee. (d) All of the above. 2. Although derivatives can be used as speculative instruments, business most often use then to: (a) Hedge. (b) Offset debt. (c) Appease stockholders. (d) Attract customers. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 59 Daily Quiz

60. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. Which is the oldest index in India? (a) S&P BSE SENSEX . (b) BSE 100. (c) CNX NIFTY. (d) BSE 200. 5. Future contracts may or may not be traded on an exchange. (a) True. (b) False. (c) True only for the year 2012. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 60 Daily Quiz

61. 6. Define hedger. 7. Discuss arbitragers. 8. What is speculation? 9. Define day trader. 10.Explain scalpers. . 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 61 Daily Quiz

62. We have covered the following topics in this lecture: Participants in the Derivatives Market 1. Hedger 2. Speculators 3. Arbitrageurs 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 62 Summary

63. Participants in the Derivatives Market 1. Hedger 2. Speculators 3. Arbitrageurs 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 63 Prerequisite and Recap

64. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Forward Contract CO1 CO3 High Medium 2 How Forward Contract Works CO1 CO3 High Medium 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 64 Topic Mapping with course outcomes

65. Students will be able to know the following concepts: Forward Contract How forward Contract Works 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 65 Objectives of topic/Session

66. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 66 T ypes of D erivatives

67. 1.Forward Contract: A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. Unlike standard futures contracts, a forward contract can be customized to any commodity, amount and delivery date. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 67 T ypes of D erivatives

68. 1.Forward Contract: The assets often traded in forward contracts include commodities like grain, precious metals, electricity, oil, beef, orange juice, and natural gas, but foreign currencies and financial instruments are also part of today's forward markets. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 68 T ypes of D erivatives

69. How It Works (Example): If you plan to grow 500 bushels of wheat next year, you could sell your wheat for whatever the price is when you harvest it, or you could lock in a price now by selling a forward contract that obligates you to sell 500 bushels of wheat to, say, Kellogg after the harvest for a fixed price. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 69 T ypes of D erivatives

70. How It Works (Example): By locking in the price now, you eliminate the risk of falling wheat prices. On the other hand, if prices rise later, you will get only what your contract entitles you to. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 70 T ypes of D erivatives

71. Forward Contracts Are Not the Same as Futures Contracts Futures and forwards both allow people to buy or sell an asset at a specific time at a given price, but forward contracts are not standardized or traded on an exchange. They are private agreements with terms that may vary from contract to contract. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 71 T ypes of D erivatives

72. 1.The base year of BSE-30 sensitive Index (SENSEX) is : (a) 1978-79 = 100 (b) 1975-76 = 100 (c) 1985-86 = 100 (d) 1972-73 = 100 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SEBI. (b) The Stock Exchange . (c) SCRA (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 72 Daily Quiz

73. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. The closing index value of the BSE Sensitive Index for the day is calculated using: (a) last traded price of the index scripss. (b) weighted average of the last 30 minutes trades of the index scrips. (c) the algorithm used to calculated closing Sensex value. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 73 Daily Quiz

74. 5. Which is the oldest index in India? (a) S&P BSE SENSEX . (b) BSE 100. (c) CNX NIFTY. (d) BSE 200. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 74 Daily Quiz

75. 6. What is forward contract? 7. Give example of forward contract. 8.Can rice be traded in derivatives market? 9. Can crude oil be traded in derivatives market? 10.Give some examples of commodity markets’ products. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 75 Daily Quiz

76. We have covered the following topics in this lecture: Forward Contract How forward Contract Works 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 76 Summary

77. Forward Contract How forward Contract Works 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 77 Prerequisite and Recap

78. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Future Contract & Option CO1 CO3 High Medium 2 Types of Option CO1 High 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 78 Topic Mapping with course outcomes

79. Students will be able to know the following concepts: Future Contract & Option Types of Option 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 79 Objectives of topic/Session

80. 2. Futures contracts : It gives the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 80 T ypes of D erivatives

81. How Do Futures Contracts Work? The assets often traded in futures contracts include commodities, stocks, and bonds. Grain, precious metals, electricity, oil, beef, orange juice, and natural gas are traditional examples of commodities, but foreign currencies, emissions credits, bandwidth, and certain financial instruments are also part of today's commodity markets. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 81 T ypes of D erivatives

82. There are two kinds of futures traders: hedgers and speculators. Hedgers do not usually seek a profit by trading commodities futures but rather seek to stabilize the revenues or costs of their business operations. Their gains or losses are usually offset to some degree by a corresponding loss or gain in the market for the underlying physical commodity.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 82 T ypes of D erivatives

83. 3. Option Contract: An options contract is an agreement between a buyer and seller that gives the purchaser of the option the right to buy or sell a particular asset at a later date at an agreed upon price. Options contracts are often used in securities, commodities, and real estate transactions. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 83 T ypes of D erivatives

84. There are two types of Option contract: Call Option: A call is an options contract that gives the buyer the right to buy the underlying asset at the strike price at any time up to the expiration date The strike price is the price at which an option buyer can buy the underlying asset. For example, a stock call option with a strike price of 10 means the option buyer can use the option to buy that stock at $10 before the option expires. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 84 T ypes of D erivatives

85. Put Option: A put is an options contract that gives the buyer the right to sell the underlying asset at the strike price at any time up to the expiration date For example, if the stock is trading at $11 on the stock market, it is not worthwhile for the put option buyer to exercise their option to sell the stock at $10 because they can sell it for a higher price ($11) on the stock market.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 85 T ypes of D erivatives

86. 3. SWAPS: A financial swap is a derivative contract where one party exchanges or "swaps" the cash flows or value of one asset for another. For example, a company paying a variable rate of interest may swap its interest payments with another company that will then pay the first company a fixed rate. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 86 T ypes of D erivatives

87. How it works? A currency  swap  is similar to an interest rate  swap , except that in a currency swap , there is often an exchange of principal, while in an interest rate  swap , the principal does not change hands. In currency  swap , on the trade date, the counter parties exchange notional amounts in the two currencies. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 87 T ypes of D erivatives

88. 1. Market makers add. (a) Speculation to the market. (b) Liquidity to the market. (c) Fluctuations to the market. (d) Nothing to the market. 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SEBI. (b) The Stock Exchange . (c) SCRA (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 88 Daily Quiz

89. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. Future contracts may or may not be traded on an exchange. (a) True. (b) False. (c) True only for the year 2012. (d) True only for the year 2012. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 89 Daily Quiz

90. 5. Each forward contract: (a) Can be structured as required by the buyer and seller. (b) Will have the same specifications. (c) Specifications are decided by the SEBI. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 90 Daily Quiz

91. 6. What do you know about SEBI? 7. Who is chairman of SEBI? 8. Financial derivatives market is regulated by……….. . 9. Discuss fluctuations in the market. 10.Define currency exchange. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 91 Daily Quiz

92. We have covered the following topics in this lecture: Future Contract & Option Types of Option 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 92 Summary

93. Future Contract & Option Types of Option 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 93 Prerequisite and Recap

94. Unit-I So. No. Mapping Topic Course Outcomes Level I 1 Major Regulations For Trading in Derivatives CO1 CO3 High Medium 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 94 Topic Mapping with course outcomes

95. Students will be able to know the following concepts: Major Regulations For Trading in Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 95 Objectives of topic/Session

96. Recommendation    From the purely regulatory angle, a separate exchange for futures trading seems to be a neater arrangement. However, considering the constraints in infrastructure facilities, the existing stock exchanges having cash trading may also be permitted to trade derivatives provided they meet the minimum eligibility conditions as indicated below : 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 96 Major Regulations For Trading In Derivatives

97. The trading should take place through an online screen-based trading system, which also has a disaster recovery site. The per-half-hour capacity of the computers and the network should be at least 4 to 5 times of the anticipated peak load in any half hour, or of the actual peak load seen in any half-hour during the preceding six months. This shall be reviewed from time to time on the basis of experience.   3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 97 Major Regulations For Trading in Derivatives

98. The clearing of the derivatives market should be done by an independent clearing corporation, which satisfies the conditions listed in a later chapter of this report.  The exchange must have an online surveillance capability which monitors positions, prices and volumes in real-time so as to deter market manipulation. Price and position limits should be used for improving market quality.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 98 Major Regulations For Trading in Derivatives

99. Information about trades, quantities, and quotes should be disseminated by the exchange in real-time over at least two information vending networks which are accessible to investors in the country.  The Exchange should have at least 50 members to start derivatives trading.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 99 Major Regulations For Trading in Derivatives

100. If derivatives trading is to take place at an existing cash market, it should be done in a separate segment with a separate membership; i.e., all members of the existing cash market would not automatically become members of the derivatives market.  The derivatives market should have a separate governing council which shall not have representation of trading/clearing members of the derivatives Exchange beyond whatever percentage SEBI may prescribe after reviewing the working of the present governance system of exchanges.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 100 Major Regulations For Trading Of Derivatives

101. 1. An investor has an buy position in a scrip. He can make his position nil in the settlement by selling. (a) Any security of equal quantity. (b) The same scrip and same quantity. (c) Any index scrip of equal quantity. (d) Any A-group scrip for equal quantity. 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SCRA (b) The Stock Exchange . (c) SEBI. (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 101 Daily Quiz

102. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. Although derivatives can be used as speculative instruments, business most often use then to: (a) Hedge. (b) Offset debt. (c) Appease stockholders. (d) Attract customers. 5. Which is the oldest index in India? (a) S&P BSE SENSEX . (b) BSE 100. (c) CNX NIFTY. (d) BSE 200. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 102 Daily Quiz

103. 6. Define share -index 7. What is offset debt? 8. What is hedge? 9. Define NIFTY 10.Give the name of oldest index in India. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 103 Daily Quiz

104. We have covered the following topics in this lecture: Major Regulations For Trading in Derivatives Future Contract & 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 104 Summary

105. Future Contract & Major Regulations For Trading in Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 105 Prerequisite and Recap

106. Unit So. No. Mapping Topic Course Outcomes Level I 1 Major Regulations For Trading in Derivatives CO1 CO3 High Medium 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 106 Topic Mapping with course outcomes

107. Students will be able to know the following concepts: Major Regulations For Trading in Derivatives 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 107 Objectives of topic/Session

108.   The Chairman of the Governing Council of the Derivative Division/Exchange shall be a member of the Governing Council. If the Chairman is a Broker/Dealer, then, he shall not carry on any Broking or Dealing Business on any Exchange during his tenure as Chairman.  The exchange should have arbitration and investor grievances redressal mechanism operative from all the four areas/regions of the country.  3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 108 Major Regulations For Trading in Derivatives

109. The exchange should have an adequate inspection capability.  No trading/clearing member should be allowed simultaneously to be on the governing council of both the derivatives market and the cash market. If already existing, the Exchange should have a satisfactory record of monitoring its members, handling investor complaints and preventing irregularities in trading. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 109 Major Regulations For Trading in Derivatives

110.   Problem: A mill owner enters into 3 months short wheat forward contract on 1 st July, 2006 when the spot price was Rs. 10/ per Kg. One contract Is for delivery of 1,000 kgs. What is the gain/loss of the farmer if on maturity, the prevailing price is-(a) Ez.9 per kg, (b) Rs. 12/kg. ? 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 110 Numerical Question

111. Formula: Pay off=(Spot price-Prevailing price)x kgs. or unit Solution: Pay off= (10-9)x1,000= Rs. 1,000(Gain) Pay off=(10-12)x1,000= Rs. 2,000(Loss) 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 111 Numerical Question

112. 1.The base year of BSE-30 sensitive Index (SENSEX) is : 1978-79 = 100 (b) 1975-76 = 100 (c) 1985-86 = 100 (d) 1972-73 = 100 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SEBI. (b) The Stock Exchange . (c) SCRA (d) The clearing member. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 112 Daily Quiz

113. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. The closing index value of the BSE Sensitive Index for the day is calculated using: (a) last traded price of the index scripss. (b) weighted average of the last 30 minutes trades of the index scrips. (c) the algorithm used to calculated closing Sensex value. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 113 Daily Quiz

114. 5. The greater the number of participant in any market, generally lower the liquidity. (a) True . (b) False. (c) True only for the year 2012. (d) True only for the year 2011. 6. The area within the exchange where training was conducted through open outcry, is known as the Pit. (a) True. (b) False. (c) None of these. (d) Sometimes called. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 114 Daily Quiz

115. Q.1 Discuss the growth of financial derivatives in the global financial markets. Q.2 Derivatives may be of three types. Explain. Q.3 Define forward contract. Explain at what time Cash flows are generated for this contract. Q.4 Discuss the liquidity and maturity of future contracts. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 115 Weekly Assignment

116. Youtube/other Video Links: https://youtu.be/KuJkFqBWpl0 https://youtu.be/i_pLF9J3QPE https://youtu.be/DE4tfkKQFRA https://youtu.be/Km01GXVOo4g 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 116 Video Links

117. 1.The base year of BSE-30 sensitive Index (SENSEX) is : 1978-79 = 100 (b) 1975-76 = 100 (c) 1985-86 = 100 (d) 1972-73 = 100 2. For the derivatives exchange, the trading member’s net-worth shall b fixed by (a) SEBI. (b) The Stock Exchange (c) SCRA (d) The clearing member 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 117 MCQ s

118. 3. On which of the following can you have a futures contract? (a) Share-Index. (b) Commodities. (c) Currency. ( d) All of the above. 4. The closing index value of the BSE Sensitive Index for the day is calculated using: (a) last traded price of the index scripss. (b) weighted average of the last 30 minutes trades of the index scrips. (c) the algorithm used to calculated closing Sensex value. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 118 MCQ s

119. 5. The greater the number of participant in any market, generally lower the liquidity. (a) True . (b) False. (c) True only for the year 2012. (d) True only for the year 2011. 6. The area within the exchange where training was conducted through open outcry, is known as the Pit. (a) True. (b) False. (c) None of these. (d) Sometimes called. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 119 MCQ s

120. 7. An investor has an buy position in a scrip. He can make his position nil in the settlement by selling. (a) Any security of equal quantity. (b) The same scrip and same quantity. (c) Any index scrip of equal quantity. (d) Any A-group scrip for equal quantity. 8. The selection criteria for a scrip to form part of the BSE Sensitive Index is : (a) The scrip must have been traded every day in the last six month. (b) The company must be a dividend paying company. (c) Number of trades in the six month should be greater than a certain number specified by the index Committee. (d) All of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 120 MCQ s

121. 9. Find the odd one out. (a) Bombay Stock Exchange. (b) New York Stock Exchange. (c) Calcutta Stock Exchange. (d) Madras Stock Exchange. 10. On-line trading is a system where trading is accomplished through terminals which are connected to a central computer. (a) True. (b) False. (c) Sometimes true. (d) Partially false. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 121 MCQ s

122. 11. Although derivatives can be used as speculative instruments, business most often use then to: (a) Hedge. (b) Offset debt. (c) Appease stockholders. (d) Attract customers. 12. Which is the oldest index in India? (a) S&P BSE SENSEX . (b) BSE 100. (c) CNX NIFTY. (d) BSE 200. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 122 MCQ s

123. 13. Market makers add. (a) Speculation to the market. (b) Liquidity to the market. (c) Fluctuations to the market. (d) Nothing to the market. 14. Future contracts may or may not be traded on an exchange. (a) True. (b) False. (c) True only for the year 2012. (d) True only for the year 2012. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 123 MCQ s

124. 15. If someone or bearing in the market? He expects the market: (a) To rise (b) To fall. (c) To move sideways. (d) To close. 16. The value of a derivatives instrument: (a) Is fixed. (b) Depends on the value of an underlying. (c) Is reset as fixed intervals. (d) None of the above. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 124 MCQ s

125. Select the correct answer of the following questions: a. Depends on the value of an underlying b. Price of the underlying c. Liquidity to the Market d. The Stock Exchange 1. For the derivatives exchange, the trading member’s net-worth shall b fixed by………………… 2. Market makers add………….. 3. The value of a derivatives instrument……. 4. Spot price is same as……… 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 125 Glossary

126. MM: 100 SECTION A Attempt all questions in brief. 2 x 7 = 14 What do you mean by ‘OTC’ trading? What do you mean by “Underlying” ? Define a forward contract. What do you mean by NTDC Contracts? Discuss the concept of American Style and European style of an option. What is currency swap? What are the various types of derivatives? 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 126 Old Question Papers

127. SECTION B Attempt any three of the following: 7 x 3 = 21 Clearly discuss the functions of futures market. Clearly differentiate between forward contracts and futures Contracts. Clearly explain the concept of call options and put options in detail. Clearly discuss the Black Schole model. What is an interest rate swap? Also discuss the features of an interest rate swap. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 127 Old Question Papers

128. SECTION C Attempt any one part of the following: 7 x 1 = 7 Clearly explain the concept of currently swap? What are the various types currency swap, clearly discuss? Clearly differentiate between options and futures. Attempt any one part of the following: 7 x 1 = 7 What is Hedging? What are the various applications of hedging in case of forwards. Explain the concept of forward market transactions. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 128 Old Question Papers

129.   Attempt any one part of the following: 7 x 1 = 7 Clearly discuss the classification of forward contracts. How the hedging can be done in case of currency options? Justify your answer with a suitable example. Attempt any one part of the following: 7 x 1 = 7 Clearly discuss the concept of cost –of –carry approach in relation to futures pricing. What do you mean by swaps? Also discuss the features of swaps. Attempt any one part of the following: 7 x 1 = 7 What do you mean by Index options ? how the hedging and speculation can be done through Index options. Clearly write a note on Indian Derivates market. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 129 Old Question Papers

130. Clearly discuss the functions of futures market. Clearly differentiate between forward contracts and futures Contracts. Clearly explain the concept of call options and put options in detail. Clearly discuss the Black-Schole model. What is an interest rate swap? Also discuss the features of an interest rate swap. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 130 Expected Questions for University Exam

131. 6. Clearly discuss the concept of cost –of –carry approach in relation to futures pricing. 7. What do you mean by swaps? Also discuss the features of swaps. Clearly explain the concept of currently swap? What are the various types currency swap, clearly discuss? Clearly differentiate between options and futures. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 131 Expected Questions for University Exam

132. We have covered the following topics in this lecture: Forward Contract Future Contract Option 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 132 Recap of Unit

133. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 133 References Source: www.aktuonline.org References : 1. Thomas Susan, Derivatives Market in India; Tata McGraw Hill 2. Financial Derivatives : Theory, Concepts and practices by S.L. Gupta, PHI, 2005. 3. Financial Derivatives by S.S.S Kumar, PHI , 2007 4. Options, Futures and other Derivatives, John C. Hull; Prentice Hall of India; New Delhi, 1997.

134. 3/16/2023 Faculty Name: Dr. Mohd Iftikhar Subject code: AMBA FM0413 (FD & RM) Unit Number::I 134 References Thank You