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Question

Which of the following statements is/are correct regarding Derivatives in India?

1)      Derivatives are financial instruments that derive their value from an underlying asset.

2)      Securities and Exchange Board of India (SEBI) regulates the trading of Derivatives in India.

3)      The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures in 1991.

A 1 only Correct Answer Incorrect Answer
B 2 and 3 only Correct Answer Incorrect Answer
C 1 and 3 only Correct Answer Incorrect Answer
D 1 and 2 only Correct Answer Incorrect Answer
E 1, 2 and 3 Correct Answer Incorrect Answer

Solution

Explanation: Statement 1 is correct as Derivatives are financial instruments that derive their value from an underlying asset. Statement 2 is also correct as SEBI regulates the trading of Derivatives in India, with a view to maintaining transparency, fairness and efficiency in the market.   The National Stock Exchange of India Limited (NSE) commenced trading in derivatives with the launch of index futures on June 12, 2000.

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