MCQOPTIONS
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MCQOPTIONS
This section includes 248 Mcqs, each offering curated multiple-choice questions to sharpen your Software Engg knowledge and support exam preparation. Choose a topic below to get started.
| 201. |
A contract that requires the investor to sell securities on a future date is called a |
| A. | short contract |
| B. | long contract |
| C. | hedge |
| D. | micro hedge |
| Answer» C. hedge | |
| 202. |
The option contract which gives the seller the obligation to buy is |
| A. | Put option |
| B. | Call option |
| C. | American option |
| D. | European option |
| Answer» B. Call option | |
| 203. |
Options on futures contracts are referred to as |
| A. | stock options. |
| B. | futures options. |
| C. | American options. |
| D. | individual options. |
| Answer» C. American options. | |
| 204. |
Which of the following is not used in Future pricing |
| A. | Cost of carry model |
| B. | Expectation model |
| C. | CAPM |
| D. | Binomial model |
| Answer» E. | |
| 205. |
What is the time value of option at expiration |
| A. | Zero |
| B. | Same as strike price |
| C. | Same as exercise price |
| D. | Same as market price |
| Answer» B. Same as strike price | |
| 206. |
The additional amount that has to deposited by the trader with broker to bring the balance of marginaccount to initial margin |
| A. | Initial margin |
| B. | Maintenance margin |
| C. | Variation margin |
| D. | Additional margin |
| Answer» D. Additional margin | |
| 207. |
By hedging Portfolio a bank manager |
| A. | Reducesinterest rate risk |
| B. | Increases exchange rate risk |
| C. | Increases reinvestment risk |
| D. | Increase the probability of gains |
| Answer» B. Increases exchange rate risk | |
| 208. |
The difference between strike price and current market price of underlying security in optioncontract is |
| A. | Time value |
| B. | Intrinsic value |
| C. | Exchange value |
| D. | Trade value |
| Answer» C. Exchange value | |
| 209. |
Which among the following is not a commodity future exchange |
| A. | NCDEX |
| B. | NSDL |
| C. | NMCE |
| D. | MCX |
| Answer» C. NMCE | |
| 210. |
Financial Derivativesinclude |
| A. | Stocks |
| B. | Bonds |
| C. | Futures |
| D. | None of these |
| Answer» D. None of these | |
| 211. |
The main advantage of using options on futures contractsrather than the futures contractsthemselvesis that |
| A. | interest rate risk is controlled while preserving the possibility of gains. |
| B. | interest rate risk is controlled, while removing the possibility of losses. |
| C. | interest rate risk is not controlled, but the possibility of gains is preserv |
| D. | d. interest rate risk is not controlled, but the possibility of gains is lost. |
| Answer» B. interest rate risk is controlled, while removing the possibility of losses. | |
| 212. |
The type of swap agreement which gives seller the chance to terminate swap at any time beforematurity. |
| A. | Coupan swap |
| B. | Callable swap |
| C. | Putable swap |
| D. | Rate capped swap |
| Answer» D. Rate capped swap | |
| 213. |
Which of the following contract is non standardised and suffers illiquidity most |
| A. | Swaps |
| B. | Forwards |
| C. | Options |
| D. | Futures |
| Answer» C. Options | |
| 214. |
A swap agreement that pays and resets at the same time. |
| A. | Constant maturity swap |
| B. | In-arrear swap |
| C. | Roller coaster swap |
| D. | Amortizing swap |
| Answer» C. Roller coaster swap | |
| 215. |
A fixed-for-floating interest rate swap with the floating rate leg tied to an index of daily interbankrates or overnight |
| A. | Power swap |
| B. | Leveraged swap |
| C. | Quanto swap |
| D. | Overnight index swaps |
| Answer» E. | |
| 216. |
A option that provides a fixed payoff depending on the fulfilment of some condition |
| A. | Asian option |
| B. | Barrier option |
| C. | Binary option |
| D. | Lookback option |
| Answer» D. Lookback option | |
| 217. |
The persons who enter into derivative contract with the objective of covering risk |
| A. | Hedgers |
| B. | Speculators |
| C. | Spreaders |
| D. | Arbitrageurs |
| Answer» B. Speculators | |
| 218. |
Forward contracts are risky because they |
| A. | are subject to lack of liquidity |
| B. | are subject to default risk. |
| C. | hedge a portfolio. |
| D. | both (a) and (b) are true. |
| Answer» E. | |
| 219. |
Short in derivative contract implies |
| A. | Middle man |
| B. | Buyer |
| C. | Seller |
| D. | Stock exchange |
| Answer» D. Stock exchange | |
| 220. |
The option contract that would lead to positive cash flow if it were exercised immediately |
| A. | In the money option |
| B. | Out of the money option |
| C. | At the money option |
| D. | None of the above |
| Answer» B. Out of the money option | |
| 221. |
By hedging a portfolio ; a bank manager |
| A. | Reduces interest rate risk |
| B. | Increases re investment risk |
| C. | Increases exchange rate risk |
| D. | None of these |
| Answer» B. Increases re investment risk | |
| 222. |
The main disadvantage of hedging with futures contracts as compared to options on futures contractsis that futures |
| A. | remove the possibility of gains. |
| B. | increase the transactions cost. |
| C. | are not as an effective a hedge. |
| D. | do not remove the possibility of losses. |
| Answer» B. increase the transactions cost. | |
| 223. |
Asian option and look back options are types of |
| A. | Vanilla option |
| B. | Exotic option |
| C. | Real option |
| D. | Warrants |
| Answer» C. Real option | |
| 224. |
………….. is the minimum amount which must be remained in a margin account |
| A. | Maintenance margin |
| B. | Variation margin |
| C. | Initial margin |
| D. | None of these |
| Answer» D. None of these | |
| 225. |
The seller of an option has the |
| A. | right to buy or sell the underlying asset. |
| B. | the obligation to buy or sell the underlying asset. |
| C. | ability to reduce transaction risk. |
| D. | right to exchange one payment stream for another. |
| Answer» C. ability to reduce transaction risk. | |
| 226. |
Which of the following is most similar to a stock broker? |
| A. | Pit trader. |
| B. | Local. |
| C. | Floor broker. |
| D. | Futures commission merchant. |
| Answer» E. | |
| 227. |
The person who takes short position in option contract |
| A. | Option writer |
| B. | Option purchaser |
| C. | Option investor |
| D. | None of the above |
| Answer» B. Option purchaser | |
| 228. |
An option that would lead to negative cash flow if it were exercised immediately is |
| A. | In the money option |
| B. | Out of the money option |
| C. | At the money option |
| D. | With money option |
| Answer» C. At the money option | |
| 229. |
The underlying amount in a swap contract |
| A. | Basis |
| B. | Notional principle |
| C. | Vested amount |
| D. | Capital |
| Answer» C. Vested amount | |
| 230. |
The type of hedge used by those who are short on the underlying asset |
| A. | Long hedge |
| B. | Short hedge |
| C. | Perfect hedge |
| D. | Imperfect hedge |
| Answer» B. Short hedge | |
| 231. |
The payoffs for financial derivatives are linked to |
| A. | securitiesthat will be issued in the future |
| B. | the volatility of interest rates |
| C. | previously issued securities |
| D. | government regulations specifying allowable rates of return. |
| Answer» D. government regulations specifying allowable rates of return. | |
| 232. |
The difference between the future price and cash price is |
| A. | Basis |
| B. | Margin |
| C. | Premium |
| D. | Strike price |
| Answer» B. Margin | |
| 233. |
A swap deal wherein floating rate payer pays the floating rate square or cubic or any power of therate to the counter party |
| A. | Leveraged swap |
| B. | Quanto swap |
| C. | Power swap |
| D. | Overnight index swap |
| Answer» D. Overnight index swap | |
| 234. |
Standardized futures contracts exist for all of the following underlying assets except: |
| A. | stock indexes. |
| B. | gold. |
| C. | common stocks. |
| D. | Treasury bonds. |
| Answer» D. Treasury bonds. | |
| 235. |
There is no arbitrage between the value of a European call and put options with same strike priceand expiry date on the same underlying asset. This is shown by |
| A. | Put-call parity pricing relationship |
| B. | Principle of convergence |
| C. | Principle of divergence |
| D. | All the above |
| Answer» B. Principle of convergence | |
| 236. |
Which of the following is over the counter traded derivative? |
| A. | Swaps |
| B. | Options |
| C. | Futures |
| D. | All the above |
| Answer» B. Options | |
| 237. |
A swap where interest rate risk can be shifted byconverting floating rate liability or vice versa |
| A. | Range accrual swaps |
| B. | Index amortizing swap |
| C. | Asian swaps |
| D. | Roller coaster swap |
| Answer» B. Index amortizing swap | |
| 238. |
When Swap is combined with Option it is called |
| A. | Swaption |
| B. | Forwad Swaps |
| C. | Swap options |
| D. | All the above |
| Answer» B. Forwad Swaps | |
| 239. |
WHICH_OF_THE_FOLLOWING_STRATEGIES_MEANS_THAT_THE_IMPACT_OF_THE_RISK_WILL_BE_REDUCED??$ |
| A. | Avoidance strategies |
| B. | Minimization strategies |
| C. | Contingency plans |
| D. | All of the mentioned |
| Answer» C. Contingency plans | |
| 240. |
Risk_management_is_now_recognized_as_one_of_the_most_important_project_management_tasks.$ |
| A. | True |
| B. | False |
| Answer» B. False | |
| 241. |
Which of the following term is best defined by the statement: “Derive traceability information to maximize information hiding in the design.”?# |
| A. | Underestimated development time |
| B. | Organizational restructuring |
| C. | Requirements changes |
| D. | None of the mentioned |
| Answer» D. None of the mentioned | |
| 242. |
Which of the following risks are derived from the software or hardware technologies that are used to develop the system? |
| A. | Managerial risks |
| B. | Technology risks |
| C. | Estimation risks |
| D. | Organizational risks |
| Answer» C. Estimation risks | |
| 243. |
Which of the following risks are derived from the organizational environment where the software is being developed? |
| A. | People risks |
| B. | Technology risks |
| C. | Estimation risks |
| D. | Organizational risks |
| Answer» E. | |
| 244. |
What assess the risk and your plans for risk mitigation and revise these when you learn more about the risk? |
| A. | Risk monitoring |
| B. | Risk planning |
| C. | Risk analysis |
| D. | Risk identification |
| Answer» B. Risk planning | |
| 245. |
Which of the following term is best defined by the statement: “The underlying technology on which the system is built is superseded by new technology.”?$ |
| A. | Technology change |
| B. | Product competition |
| C. | Requirements change |
| D. | None of the mentioned |
| Answer» B. Product competition | |
| 246. |
Which of the following term is best defined by the statement: “There will be a change of organizational management with different priorities.”?$ |
| A. | Staff turnover |
| B. | Technology change |
| C. | Management change |
| D. | Product competition |
| Answer» D. Product competition | |
| 247. |
Which of the following risk is the failure of a purchased component to perform as expected? |
| A. | Product risk |
| B. | Project risk |
| C. | Business risk |
| D. | Programming risk |
| Answer» B. Project risk | |
| 248. |
Risk management is one of the most important jobs for a |
| A. | Client |
| B. | Investor |
| C. | Production team |
| D. | Project manager |
| Answer» E. | |