NISM Series VIII - Equity Derivatives Exam Series - 13
NISM Series VIII - Equity Derivatives Exam Series - 13
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Q 1. Identify the FALSE statement concerning Impact Cost.
Impact costs are also to be considered while selecting stocks to be included in the index
The impact cost is the same for the seller and the buyer of the stock
Impact costs vary as per the transaction size
The impact cost of a stock is a measure of its liquidity
Q 2. A trader sells a futures contract and the price rises. The trader will _____.
make a loss
make a profit
Q 3. Mr. Harish has purchased 20 call options on the stock by paying a premium of Rs 10 per call (Strike price of Rs. 125). The stock price has closed at Rs. 100 on the exercise date. Based on economic rationale alone, Mr. Harish _________.
Should exercise the option but he should not take delivery of the underlying
Should exercise the option
Shouldn't exercise the option
Should exercise this option as he likes the management of the company
Q 4. The main proof of whether a futures transaction is for speculation or hedging is based on whether there already exists a related commercial position which is exposed to risk of loss due to price movement - State True or False?
TRUE
FALSE
Q 5. The idea and economic rationale of introducing forward contracts is to________.
help arbitrage
help to trade
help to hedge
both 1 and 3
Q 6. If you have bought a futures contract and the price drops, you will _________.
Make a notional profit
Make a notional loss
given information is incomplete to arrive at a conclusion
none of the above
Q 7. If you have a long position in the futures contract, you can square up it by _________.
Buy a call option for that security
Selling the same futures contract
Selling a long month futures contract so that you have more time and can earn more
Buying a put option for that security
Q 8. The MTM (Mark-to-Market) margin is always equal to the Initial margin - True or False?
TRUE
FALSE
Q 9. A short position in the PUT option can be closed out by taking a long position in the same PUT option - State True or False?
FALSE
TRUE
Q 10. Meghna wants to sell 34 contracts of ABC futures at Rs. 2450 (contract multiplier is $50)). The initial margin is 7%. What will be the initial margin to be paid?
Rs. 4165000
Rs. 83300
Rs. 5831
Rs. 291550
Q 11. When an investor instructs his broker to buy a certain number of contracts at or below a specific price, the order is called _________.
Market Order
Arbitrage Order
Spread Order
Limit Order
Q 12. Client A has purchased 10 contracts for the December series and sold 7 contracts for the January series of the NSE Nifty futures. How many lots will get categorized as regular (non-spread) open positions?
3
7
10
17
Q 13. All active members of the Exchange are required to make an initial contribution towards the Trade Guarantee Fund of the Exchange - State True or False?
TRUE
FALSE
Q 14. Of the below options, when will the April index future contract be introduced on NSE?
On the 1st trading day after last Thursday in March
On the 1st trading day after last Friday in March
On the 1st trading day after last Thursday in January
On the 1st trading day after last Friday in January
Q 15. Thursday is usually the last trading day of a futures series. If it's a holiday on this day then which will be the last trading day?
The next working day
The previous working day
The first day of the next month
Two days later