NISM Series VIII - Equity Derivatives Exam Series - 8
NISM Series VIII - Equity Derivatives Exam Series - 8
Q 1. Mr. A buys a call option with a lower strike price and sells another call option with a higher strike price both on the same underlying share and same expiration date, the strategy is called______
Bull Spread
Bear Spread
Butterfly Spread
Calendar Spread
Q 2. The daily settlement prices of equity derivatives are decided by _________.
Clearing Corporation
SEBI
Brokers Association
RBI
Q 3. Option Premium consists of two components –
Intrinsic value and time value
Sum of Call and Put premium
Premium value and time value
Intrinsic value and premium
Q 4. In the Options segment, if you buy a CALL at a premium of Rs 35 at the Strike Price of Rs 400, a lot is of 200 shares, then the maximum possible Profit is ______
Rs 400
Rs 7000
Rs 43000
Unlimited
Q 5. If there is a debit balance in the _________, it represents an anticipated loss on a futures contract.
Mark-to-market Margin account
Additional Margin account
Initial Margin account
Exposure Margin account
Q 6. According to the corporate hierarchy for users defined in the trading system for stock exchanges, the exposure limits for the branches of the broking firm can be defined only by the ________.
Dealer
Branch Manager
Corporate Manager
Firm Manager
Q 7. In the derivatives futures market, if there are three series of one, two, and three months open at a point in time, how many calendar spreads can one have?
1
2
3
4
Q 8. A Derivative market helps in transferring the risk from ________.
Speculators for Hedgers
Arbitrageurs for Hedgers
Speculators for Arbitrageurs
Hedgers to Speculators
Q 9. Bulls' are investors who believe the market will rise - State True or False?
TRUE
FALSE
Q 10. In a calendar spread transaction, the trader takes the opposite position in two futures contracts with _______.
two different underlying assets and the same delivery month
two different delivery months and two different underlying assets
two different delivery months with the same underlying asset
one stock and one index for the the same delivery months
Q 11. Those contracts which have been initiated but are not yet offset by a subsequent sale or purchase or by making or taking delivery are considered as ______.
Offsetting Positions
Clear Positions
Open Positions
Squared-off Positions
Q 12. In the case of a futures contract, profits or losses are received/paid only on maturity - State whether True or False.
TRUE
FALSE
Q 13. A fall in the price of Wipro stock will increase the value of the Wipro call option - State True or False?
TRUE
FALSE
Q 14. Foreign Exchange can be a part of liquid assets to be maintained by Clearing Members with the clearing corporation - State True or False?
TRUE
FALSE
Q 15. Does a high initial margin level improve the solvency & financial capability of the clearing corporation - True or False?
TRUE