NISM DEPOSITORY OPERATIONS - 4
nism-depository-operations-4
Mock Test with Answer key - Click Here >>
Q 1. Suppose you are a trading member and have bought 14 contracts of April series index futures and sold 7 contracts of April series index futures on your account. What will be your exposure to these transactions?
It will grossed up to 21 contracts
It will be netted to 7 contracts
Higher of 14 and 7 ie. 14 contracts
The Stock Exchange can decide to either to gross up or net out the exposure depending on the past record of the trading member
Q 2. What Option gives the holder a right to buy the underlying asset on or before a particular date for a certain price?
European call option
European put option
American call option
American put option
Q 3. Mr. Ashish is a portfolio manager and he is bullish on the market. What should be his course of action ?
He should sell index futures
He should sell index call option
He should buy index futures
He should sell his complete portfolio
Q 4. Each investor who wishes to trade in the derivatives segment is required to satisfy minimum net worth conditions - State True or False ?
TRUE
FALSE
Q 5. A mutual fund manager is bearish on the market and wishes to reduce its exposure to equities from 50% to 40% without selling any of his equity holdings. Can he sell index futures for it?
Yes, he can sell index futures
No, mutual funds are not allowed to sell index futures
Q 6. Ashish is bullish about HLL, which trades in the spot market at Rs.210. He buys 10 three-month call option contracts on HLL with a strike of 230 at a premium of Rs. 1.05 per call. Three months later, HLL closed at Rs. 250. Assuming 1 contract = 100 shares, his profit on the position is ____.
(a) Rs.18,950nbsp;
(b) Rs.19,500/
(c) Rs.10,000
(d) Rs.20,000
Q 7. Impact cost is low when ____________.
Volume/liquidity is low
Volume/liquidity is high
The scrip is trading at an all-time high
The scrip is trading at an all-time low
Q 8. The option premium is decided by __________.
SEBI
Stock Exchanges
By buyers and sellers
By Stock Brokers
Q 9. Speculator accepts the risks in search of profits—state true or false?
FALSE
TRUE
Q 10. The main proof of whether a futures transaction is for speculation or hedging is based on whether there already exists a related commercial position that is exposed to risk of loss due to price movement—state true or false?
TRUE
FALSE
Q 11. If a person has a buy position in a stock; how can he cover his long position in the stock?
by selling any security of equal quantity
by selling any index stock of equal quantity
by selling the same stock and same quantity
by selling any ‘A’ group stock of equal quantity
Q 12. 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 13. Can one sell assets in the futures market even if he does not own any such assets?
Yes
No
Q 14. What does an option give the buyer?
The right but not the obligation
The obligation but not the right
It gives both the right and obligation
Neither the right not the obligation
Q 15. In the derivative segment, once the initial margin requirement is fixed, it cannot be changed by the exchange during the lifetime of the futures contract—state true or false?
TRUE
FALSE