NISM Series VIII - Equity Derivatives Exam Series - 20
NISM Series VIII - Equity Derivatives Exam Series - 20
Q 1. A clearing member reaches his prescribed position limits, therefore he will ________.
be allowed to take only 5% additional exposure
not be able to reverse his position
able to take on fresh new positions for his clients but not in his proprietary account
Not able to open new positions
Q 2. In stock markets, Beta is a statistical measure of the sensitivity of the movement of a share price to the movement of prevailing interest rates - State True or False?
TRUE
FALSE
Q 3. A long or short position in a futures contract can be closed by initiating a reverse trade - State True or False?
TRUE
FALSE
Q 4. Mr. Nayar has purchased 8 contracts of the March series and sold 6 contracts of the April series to NSE Nifty Futures. How many lots will get categorized as Regular (non-spread) open positions?
14
8
2
6
Q 5. Delta measures the expected change in the option premium for a unit change in ________.
Volatility of underlying assets
Treasury interest rates
time to option expiry
the spot price of the underlying assets
Q 6. In the Options segment, if you buy a CALL, you can expect the market/scrip to move _____
Down
Up
One cannot buy a Call in the options market
Remaining range-bound
Q 7. When there is high volatility in the stock markets, the Bid-Ask spreads will generally _______.
widen
narrow
It will be zero
There will be no changes in the bid-ask spreads
Q 8. The risk that cannot be controlled by diversification of the portfolio is _____.
Systematic Risk
Unsystematic Risk
Credit Risk
Operational Risk
Q 9. If a speculator purchases a naked Call Option, this means he/she has a ______.
Mixed view
Bullish view
Myopic view
Bearish view
Q 10. In the derivatives market, is the mark-to-market margin equal to the initial margin - State True or False?
TRUE
FALSE
Q 11. Default risk is also known as ________.
Credit Risk
Counterparty Risk
Both of the above
None of the above
Q 12. A Buyer or holder of the option is the party to the contract who has __________.
the obligation but not the right
the right but not the obligation
the right and the obligation
None of the above
Q 13. By meeting additional requirements, a Trading Member can also be a Clearing Member – True or False?
TRUE
FALSE
Q 14. A trader sells a lower strike price CALL option and buys a higher strike price CALL option, both of the same script and same expiry date. This strategy is called _______.
Bearish Spread
Bullish Spread
Long term Investment
Butterfly
Q 15. Which of the following is closest to the forward price of a share, if the Cash Price = Rs.750, the Forward Contract Maturity = 6 months from the date, Market Interest rate = 12%?
795
840
940.8
772.5