NISM Series VIII - Equity Derivatives Exam Series - 1

Find More Mock Tests Here  

Q 1. Vega measures the change in delta with respect to change in the price of the underlying asset - State True or False?

TRUE

FALSE

Q 2. The broker is compulsorily required to get a Risk Disclosure Document signed by the client, at the time of client registration - State True or False?

TRUE

FALSE

Q 3. What should be the market-wide position limit for a stock for it to be eligible for launch in the futures and options contracts in the exchange-traded equity derivatives segment in India?

At least Rs. 100 crores

At least Rs. 500 crores

At least Rs. 1000 crores

At least Rs. 2500 crores

Q 4. Is the rate of change in option premium for a unit change in the price of the underlying asset known as Delta - State True or False?

FALSE

TRUE

Q 5. The strategy of buying a put option on a stock you are owning is known as _______.

calendar spread

aggressive put

protective put

Straddle

Q 6. Position limits have been designed to _______.

prevent markets from being wrongly influenced by Government policies

support the market and determine its movements

stop the markets being wrongly influenced by the trading activities of investor(s)

all of the above

Q 7. Which of these is not included in the Indian equity derivatives market?

Interest rate futures

Individual stock options

Individual stock futures

Options for equity market indices

Q 8. Identify the strategy that has a ‘limited potential gain with limited possible loss.

Going short on an At-the-money index put and going long in an Out-of-the-money index put option, both with the same expiry date

Going long in index put option

Going short on index call options

Going long on index call option

Q 9. What does a beta of more than 1 mean?

This means that the expected percentage change in stock price will be twice the percentage change in index

This means that the expected percentage change in stock price will be less percentage change in the index

This means that the expected percentage change in stock price will be more than the percentage change in index

This means that the expected percentage change in stock price equals the percentage change in index

Q 10. What happens to a 'Day Order' if it's not executed during the day?

The Order will be executed in the auction market

Order will be executed after-hours

Order will be executed on the next trading day

Order will be canceled automatically at the end of the day

Q 11. What is the role of speculators in the market?

They stabilise the markets

They reduce their risks by speculating

They maintain Dollar-Rupee price parity

They add to the liquidity in the futures market

Q 12. As per Accounting Standards, the initial margin paid by an option seller is shown under ___________ in the balance sheet

Bad Debts

Fixed Assets

Current Assets

Current Liabilities

Q 13. Stock price is ____________.

same as in the near month futures contract

same as the exercise price of an option

same as the strike price of an option

the price of the underlying in the spot market

Q 14. Mr. Sharma purchased a call option on the stock at Rs. 10 per call with a strike price of Rs. 140. If on the exercise date, the stock price is Rs. 168, ignoring transaction cost, Mr. Sharma will choose _______

Exercise the option

Don't exercise the option

It may or may not depend on the balance he has in his bank account

It may or may not depend on the recommendation of experts

Q 15. What is the lot size for contracts on individual stock futures/options?

It differs from stock to stock

1000 for all stocks

It is 5000 for all stocks

It is 100 for all stocks


Find More Mock Tests Here