NISM Series VIII - Equity Derivatives Exam Series - 7

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Q 1. Can a long position in the Put option be closed out by taking a short position in a call option with an identical exercise date and exercise price? 

Yes

No

Q 2. Theta is a measure of the sensitivity of an option price to changes in market volatility. - State True or False?

TRUE

FALSE

Q 3. What does a 'Near Month' futures contract mean?

Near Month' is the current month of the futures contract

Near Month' is the month after the current month of the futures contract

Near Month' is the month of expiry of the futures contract

None of the above

Q 4. The risks connected with trading in derivatives that have to be laid down in which document?

Contract Note which is sent to the client

Risk Disclosure document

This can be conveyed verbally to the client

None of the above

Q 5. Which of these strategies is not a HEDGE?

Ms. Agarwal is bullish on the market so she buys an Out-of-the-money index call and sells an out-of-the-money index put option

A trader with a short index futures position buys an out-of-the-money call on the index to limit his loss.

An importer is expecting to send dollars in 1 month and takes a long position in one-month USDINR futures to lock in his dollar price

The fund manager is expecting market volatility after RBI policy buys index put options to limit the loss in his portfolio

Q 6. For derivative exchanges, the exposure amount possible for each member broker is linked to the number of deposits/margins kept by the member with the clearing house - True or False?

TRUE

FALSE

Q 7. What is a 'Stock Option'?

It's a debt instrument

It's a derivative instrument

It's a foreign exchange instrument

It's a money market instrument

Q 8. If the margins are kept on the lower side, will it attract more players to join the derivatives market - State True or False?

TRUE

FALSE

Q 9. Trading members on the exchanges derivatives segment are not required to be registered with SEBI.- State whether True or False ?

FALSE

TRUE

Q 10. Change in option premium for a unit change in ________ is known as Rho.

market volatility

Price of the underlying asset

Risk free interest rate

liquidity

Q 11. The minimum price movement in a script is called BASIS.

TRUE

FALSE

Q 12. A stock exchange has ON LINE SURVEILLANCE capability to monitor the __________.

Volumes

Prices

Positions

All of the above

Q 13. It is recommended but not compulsory that all Stock Exchanges of India have a uniform settlement cycle. True or False ?

FALSE

TRUE

Q 14. In index futures, if the near leg of the calendar spread transaction expires then the farther leg becomes a regular open position.

TRUE

FALSE

Q 15. The IPF (Investor Protection Fund) for the derivatives segment is ________ .

Same as that of cash segment

Independent of that of cash segment

There is no IPF in derivatives segment

100% Contributed by Ministry of Finance

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