GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Stock Futures
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Index Options
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Index Futures
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Forward Rate Agreements
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Detailed explanation-1: -There are mainly four types of derivative contracts such as futures, forwards, options & swaps. However, Swaps are complex instruments that are not traded in the Indian stock market.
Detailed explanation-2: -An over-the-counter (OTC) derivative is a financial contract that does not trade on an asset exchange, and which can be tailored to each party’s needs. A derivative is a security with a price that is dependent upon or derived from one or more underlying assets.
Detailed explanation-3: -The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000. The futures contracts are based on the popular benchmark Nifty 50 Index. The Exchange introduced trading in Index Options (also based on Nifty 50) on June 4, 2001.
Detailed explanation-4: -Swap Contracts The currency derivates underlying a swap contract is either an interest rate or currency itself-both of which are volatile in nature. Hence, swap contracts tend to protect parties from various risks. Such types of derivative securities are not traded on public exchanges.
Detailed explanation-5: -The four major types of derivative contracts are options, forwards, futures and swaps.