Differentiate a futures contract from an option contract.Question $2$

a$.$ How can derivative contracts be used for arbitrage purposes? Briefly explain with an

example.

$(3$ Marks$)$

b$.$ Differentiate a futures contract from an option contract.

$(3$ Marks$)$

c$.$ Two parties enter into a forward contract for $100$ tons wheat at a delivery price of BDT

$40,000$ per ton, with a delivery date of $5$ months from now. If the market price of wheat

falls to BDT $37,000$ per ton, during the delivery date. Calculate the value of the

forward contract for the short position.

$(2$ Marks$)$

Question $3$

a$.$ A group of investors are planning to start a commercial bank in Bangladesh. The

capital requirement to start its operations is BDT $600$ crore. Describe two sources of

funds that you will seek to meet this capital requirement.

$(3$ Marks$)$

b$.$ Briefly discuss the difference between term deposit and current deposit accounts of

commercial banks.

$(2$ Marks$)$

c$.$ Briefly discuss features of defined contribution plans.

$(2$ Marks$)$

Question $4$

a$.$ How are NBFIs and Commercial Banks different from each other? $(2$ Marks$)$

b$.$ Discuss the credit risk and liquidity risk for NBFIs.

$(3$ Marks$)$

c$.$ Discuss adverse selection and moral hazard problems in Fire insurance contracts for

manufacturing plants?

$(3$ Marks$)$