NISM Series VIII - Equity Derivatives Paper - 02
| Q1.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 the risk of loss due to price movement - State True or False? |
| True |
| False |
| Q 2.A derivative market would primarily have __. |
| Speculators |
| Hedgers |
| Long term investors |
| Both 1 and 2 |
| Q3.Clearing member Ram has 6 trading members who are all in Mumbai and Clearing member Shyam has 6 trading members who are all outside Mumbai. Both of them have deposited the same amount of liquid assets with the clearing corporation. Which amongst the following statement is True? |
| Clearing Member Ram will have a higher exposure limit than Clearing Member Shyam |
| Clearing Member Shyam will have a higher exposure limit than Clearing Member Ram |
| Both Ram and Shyam will have the equal exposure limits |
| None of the above |
| Q4.Hedging would ensure that your profits are always on the higher side compared to an unhedged position - State True or False? |
| True |
| False |
| Q5.The minimum Networth requirement for a clearing member of Capital Market Segment and F&O segment is – |
| Rs 50 lakhs |
| Rs 100 lakhs |
| Rs 250 lakhs |
| Rs 300 lakhs |
| Q6.Any person who wishes to open a Trading Account must be given the following documents by his trading member - |
| The complete version of all the laws of SEBI |
| Risk disclosure document |
| All the rules & regulations of the exchange |
| SEBI guidelines on the subject |
| Q7.Derivatives brokers/ dealers are expected to know their clients and to exercise care to ensure that the derivative product being sold by them to a particular client is suitable to his understanding and financial capabilities - State True or False? |
| True |
| False |
| Q8.A farmer agrees to sell 100 tonnes of sugarcane to a factory after 2 months at a specific price. What is this type of contract known as? |
| Swaption |
| Future Contract |
| Forward Contract |
| None of the above |
| Q9. The liquid assets which are to be deposited by the clearing member can be in the form of ____. |
| Only cash |
| Only cash and approved securities |
| Cash, Bank Guarantees, Equity Securities and other Cash Equivalents |
| None of the above |
| Q10.Mr. Singh purchases a call option on a stock at Rs. 10 per call with a strike price of Rs. 140. If on the exercise date, the stock price is Rs. 168, ignoring transaction cost, Mr. Singh will choose ____ |
| To exercise the option |
| Not to exercise the option |
| May or may not depend on the balance he has in his bank account |
| May or may not depend on the recommendation of experts |