Interest / Index Arbitrage

13 Questions | Total Attempts: 38

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Interest / Index Arbitrage - Quiz

This quiz is  to test your understanding of various low risk products,questions asked are very simple and every one is expexted to get full marks.  


Questions and Answers
  • 1. 
          What arbitrage trade can you make from following situation:    Cash trading at: Rs.100    Current month future trading at: Rs. 95    Next month future trading at: Rs.97
    • A. 

      Current month cash futures

    • B. 

      Next month cash futures

    • C. 

      Calendar

    • D. 

      None of the above

  • 2. 
     Record date for a stock is 27th Feb 2008 & dividend declared is Rs.15. What trade will you take if the expiry is on 26th  Feb  2008 given the following situation:   Cash trading at: Rs.1232   Current month future trading at: Rs. 1229   Next month future trading at: Rs.1227
    • A. 

      Current month cash futures

    • B. 

      Next month cash futures

    • C. 

      Calendar

    • D. 

      None of the above

  • 3. 
     You have 20,000 shares of Rs.100 each, company declares split of 1:5. What is the value of shares that you will have after ex-date?
    • A. 

      Rs.100,00,000

    • B. 

      Rs.20,00,000

    • C. 

      Rs. 1,00,000

    • D. 

      Rs. 2,00,00,000

  • 4. 
    If you flip a stock with inflow of 0.5% and reinitiate the position at end of the day with outflow of  0.1% you have gained intraday (approx.):
    • A. 

      0.3%

    • B. 

      0.4%

    • C. 

      0.33%

    • D. 

      None of the above

  • 5. 
    What is the cost for BSE NSE arbitrage? 
    • A. 

      0.35%

    • B. 

      0.15%

    • C. 

      0.07%

    • D. 

      0.28%

  • 6. 
    You have position in XYZ stock in which you were neither able to flip nor roll. What will you do to exit the position?
    • A. 

      Do price discovery for cash

    • B. 

      Do price discovery for future

    • C. 

      Sell equal quantity of cash every hour throughout the day

    • D. 

      None of the above

  • 7. 
    If cash trading at Rs. 200 and dividend declared in the stock is Rs. 5, at what price should the future trade so that there does not exist any arbitrage opportunity?
    • A. 

      Rs. 200

    • B. 

      Rs. 195

    • C. 

      Rs. 205

    • D. 

      None of the above

  • 8. 
     During post market trading at what price should one put the order in NSE?
    • A. 

      Average traded price

    • B. 

      Closing price

    • C. 

      LTP

    • D. 

      MKT

  • 9. 
     What happens when the stock goes Ex-rights?
    • A. 

      Mkt cap of the company decreases

    • B. 

      Mkt. cap of the company increases

    • C. 

      Number of shares and Mkt cap. of the company increases

    • D. 

      Number of shares and Mkt cap. of the company decreases

  • 10. 
      Following data has been calculated taking closing prices as on 30th Jan:Total Mkt. Cap of the INDEX: 50 CrMkt. Cap of stock Y: 0.25 CrMkt. Cap of stock X: 1.25 CrStock X is going to replace stock Y in the Index. From the above information find:1) Weight of stock X in Changed Index
    • A. 

      2.25%

    • B. 

      0.5%

    • C. 

      2.51%

    • D. 

      None of the above

  • 11. 
    1. 2) Adjustment that has to be done if you have Undha baskets 
  • A. 

    Buy Y and Sell X

  • B. 

    Buy X and Sell Y

  • C. 

    Buy X and Y

  • 12. 
    Sensex is a ....
    • A. 

      Market cap. weighted Index

    • B. 

      Free Float weighted Index

    • C. 

      Price Weighted Index

    • D. 

      Volume Weighted Index

  • 13. 
    Is there any arbitrage opportunity given the following situation?Cash trading @ 5083Call trading @ 150Put trading @ 75Strike 5000
    • A. 

      Yes, Conversion

    • B. 

      No opportunity

    • C. 

      Yes, Reversal

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