NISM Series VIII - Equity Derivatives Exam Series - 15
NISM Series VIII - Equity Derivatives Exam Series - 15
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Q 1. Calendar spreads carry only ________ risk.
speculative
market
basis
interest
Q 2. A low level of initial margin increases the possibility of defaults for a stock broker - State True or False?
TRUE
FALSE
Q 3. Mr. Sriniwas took a short position on the call option but did not take any offsetting position on the underlying stock. This strategy is known as ______.
Writing a covered call
Writing a naked call
Butterfly strategy
Protective putting strategy
Q 4. How can you close a short position in a futures market?
By buying a Call Option
By entering into a suitable forward contract
By executing the purchase of the same futures contracts
By executing the sale of the same futures contracts
Q 5. Mr X sells one ABC stock futures contract at Rs. 745. What is his profit (+) or loss (-), if he purchases the contract back at Rs. 754 ? Lot size is 1500
13500
-13500
9800
-9800
Q 6. Intrinsic value is always positive for in-the-money options and zero for out-of-the-money options - State True or False?
TRUE
FALSE
Q 7. Can Professional Clearing members act only on behalf of institutional clients?
Yes
No
Q 8. Futures trading is considered more risky than equity trading due to _________.
high leverage
High pressure
high volatility
high liquidity
Q 9. With a fall in interest rates, the premium on CALL Options will _______.
Rise
Fall
No Effect
None of the above
Q 10. Which of these strategies has the same pay-off profile as that of the Covered Call strategy?
Bearish Call Spread
Short Put strategy
Long Put strategy
Bullish Put Spread
Q 11. All 50 stocks of the NSE Nifty index are equally weighed while calculating the index - State True or False?
TRUE
FALSE
Q 12. The initial margin is always equal to the mark-to-market margin - State True or False?
TRUE
FALSE
Q 13. As per SEBI's guidelines, derivatives trading takes place through ______.
Online screen-based trading system
Kerb trading
Auctions at public mandis
Open outcry methods in the trading ring
Q 14. Mr. Sunil placed a stop-loss sale order on ABC stock with a trigger price of Rs. 450. The current market price of ABC stock is Rs 470. The order will be released for execution ______
As soon as the market price of ABC touches Rs. 470
As soon as the market price of ABC touches Rs. 450
As soon as the order is placed in the system
If similar orders are available in the order book at Rs. 450
Q 15. An American putting option gives the buyer the right but not the obligation to sell to the writer an underlying asset at a specified price on or before the expiry date - State whether True or False.
TRUE