1. Which statement is false?

1. The size of global economy is above USD 10 trillion.
2. Quantitative study of asset price initially started to predict market behavior and identify certain abstract ideas such as risks.
3. Investors keep struggling to Predict Price, Quantify Risks and Identify Arbitrage.
4. The three components of Trust in financial sense are Honesty, Integrity and Reliability.
5. In an overheating economy interest rates needs to be reduced successively to cool down the economy.

2. Arrange the financial markets in the order of magnitude, from smaller to larger - stocks, bonds and derivatives-

1. Stock markets, bond markets, derivative markets.
2. Bonds markets, stock markets, derivative markets.
3. Derivative markets, stock markets, bond markets.
4. It is difficult to rank these markets as their value keeps fluctuating with time.

3. Unlike shares and bonds - the warrants or options can only be traded (bought or sold) by institutional investors or High Net Worth Individuals (HNI). This is because to trade options one must first own the underlying asset.

1. The statement is false, there is an entire secondary market where anyone can buy or sell options and warrants.
2. The statement is true as there are no secondary markets of warrants.
3. The statement is only partly true.
4. It depends on circumstances.

4. What is the best example of Arbitrage among statements below?

1. Ability to buy and sell an asset in different markets simultaneously and making profits.
2. By buying an asset in one market at one price and selling it in a different market at a different price and making profits by doing so.
3. To trade in security when it is trading in two different markets and there is a price anomaly and a swift trade can bring some risk free profits before market realizes the anomaly.
4. All of the above.

5. Volatility is a measure of dispersion of returns of a given security or a market index. An asset A is considered to be more volatile than the other asset B if:

1. A is trading at a way higher PE multiple than asset B.
2. A has a much smaller liquidity than asset B.
3. With time, A s price fluctuates more than B in percentage terms.
4. None of the above.

6. Please select from below the list that represents fungible assets:

1. Futures, forward contracts, pure gold
2. Shares, one future of sweet crude oil, bonds
3. A prime property, 1 carat diamond, one gram of pure gold
4. Any asset that can be converted into cash easily is a fungible asset