NISM Series VIII - Equity Derivatives Exam Series - 24
NISM Series VIII - Equity Derivatives Exam Series - 24
Q 1. What is Tick size?
Tick size is the size of the futures contract
Tick size is the maximum permitted movement in the price of the contract
Tick size is the minimum permitted movement in the price of the contract
Tick size is the average of the high and low permitted prices
Q 2. To calculate the net worth of a clearing member, which of these is/are NOT considered?
His Fixed Assets
He pledged securities
His membership card
All of the above
Q 3. In the case of forward contracts, the rules regarding the minimum amount by which the price would change and the price limits are specified by an authority - State True or False?
TRUE
FALSE
Q 4. For portfolio hedging by institutions and mutual funds, index-based derivatives are more suitable and are much more cost-effective than derivatives based on individual stocks - State True or False?
TRUE
FALSE
Q 5. An investor who is less risk averse would like to have greater exposure to equity and other risky investments compared to fixed income instruments - State True or False?
FALSE
TRUE
Q 6. Identify the CORRECT statement.
The margins paid by institutional investors are higher than retail investors
Margins in derivatives trading depend on volatility and price movement of the underlying
The margins paid by retail investors are higher than institutional investors
There are no margins in derivatives trading for Institutional investors
Q 7. There are many products in the market give high returns in a risk-free manner - State whether True or False.
TRUE
FALSE
Q 8. In connection with the futures market, the basis is ________.
The current interest rate in the economy
Volatility in the market
The difference between the futures price and the spot price
Underlying market price
Q 9. Losses incurred on derivative transactions on a ‘recognized stock exchange’ can be carried forward to _____ subsequent assessment year and set off against any other non-speculative business income of the subsequent year.
5
8
12
15
Q 10. Mr. Sam is an equity fund manager and he is bearish on the stock market. How will he use this view to create a hedge?
He will sell all his stocks
He will decrease the NAV of his fund
He will sell index futures
He will buy index futures
Q 11. On the National Stock Exchange, for its index futures, what would be the opening day of its April series?
Last Friday of March month
Last Friday of April month
Last Friday of January month
Last Friday of February month
Q 12. Non-systemic risks can be reduced by diversifying one’s portfolio.
TRUE
FALSE
Q 13. The daily settlement of all open positions in a futures contract is called ________.
Exercising the futures contract
Mark for Market Settlement
VAR settlement
None of the above
Q 14. With regards to the futures market, BASIS is the _______.
price of the underlying stock
difference in price between spot and future prices
Risk-free rate of interest
Volatility in stock
Q 15. In the exercise call option on an index, the option holder receives from the option writer, an amount equal to excess of the spot price (at the time of exercise) over the strike price of the call option - State whether True or False.
TRUE