NISM Series VIII - Equity Derivatives Exam Series - 11
NISM Series VIII - Equity Derivatives Exam Series - 11
Q 1. If the interest rate increases, will the premium on the CALL option also increase - State True or False?
TRUE
FALSE
Q 2. The Exercise price of an option is the same as its position limit - State whether True or False.
TRUE
FALSE
Q 3. If the price of a future contract increases, the mark-to-market margin account of the holder of the short position in that contract is credited for the gain. State whether True or False.
TRUE
FALSE
Q 4. In the case of CALL OPTION, it gives the buyer the right to _________.
buy the underlying at market price
buy the underlying at a set price.
sell the underlying at market price
sell the underlying at a set price
Q 5. Arbitrage is a tool to protect one's portfolio against any downturn by going short in an index. True or False?
TRUE
FALSE
Q 6. How can an open position in a futures contract be closed?
It has to be closed compulsorily before maturity
This can be closed for intra-day transactions only
It can be closed at maturity
It can be closed anytime on or before the date of maturity through reversed (square-off) transaction
Q 7. Who does the Clearing Member need to consult to set limits on the trade members clearing through him?
Clearing Corporation
SEBI
The respective Stock Exchange
No consultation is required with anyone as the Clearing Member can set the limits of his trading with members on his own
Q 8. If there is no cross-margining between cash and derivative segments of an exchange, this will _________.
Promotes economic inefficiency
Increase the cost of trading
Reduces volumes for a given level of risk capital in the economy
All of the above
Q 9. The exercise date and expiration date of the European option is ________.
Always the same
Always on the 28th of the expiry month
always different
Maybe the same
Q 10. Margins in futures trading apply to -
Only Institutional players.
Both the buyer and the seller
Only the buyer
Only the Seller
Q 11. The seller of the put option gains if the price of the underlying asset___________
Decreases
Increases
Do not change
Both 2 and 3
Q 12. A risky trader/speculator believes that the future price of an ABC company will fall, and that being a smart trader, he will ________________.
buy ABC futures now and sell them later when they fall
wait till the prices of ABC futures and cash market prices become the same
Selling ABC futures now and buying them later when the price falls
will do nothing as he has suffered a loss in his previous trade.
Q 13. To confirm whether a futures transaction is for hedging or speculation centered on ______.
the basic intention of the person entering into the transaction
whether there already exists a related commercial position that has a risk of loss due to price movement
whether the futures position is held till the expiry date
whether the transaction has resulted in a profit or a loss
Q 14. Can the exercise price be more than or equal to or less than the cash spot price?
Yes
No
Q 15. For which type of option is it profitable to exercise the options?
At the Money
Out of the Money
In the Money
None of the above
Find More Mock Tests Here