NISM Series VIII - Equity Derivatives Paper - 26
| Q1.What is an Index Option? |
| It's a derivative product |
| It essentially settled in cash |
| Index options are not allowed in Indian markets |
| Both 1 and 2 |
| Q2.Can a broker take any amount of exposure once he has satisfied the minimum net worth and minimum deposit with the exchange in the form of liquid assets? |
| Yes |
| No |
| Q 3.A person who provides two-way quotes for various stocks is known as __. |
| Arbitrageur |
| Speculator |
| Hedger |
| Market Maker |
| Q4.___ is not a derivatives market product. |
| Preference Share |
| Futures |
| Swaps |
| Options |
| Q5.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 |
| Q6.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 |
| Q7.When a PUT option on an index is exercised, the option holder receives from the option writer ____. |
| A cash amount that is equal to the excess of spot price over exercise price |
| A cash amount that is equal to the excess of exercise price over spot price |
| A cash amount that is equal to spot price |
| No amount |
| Q8.Netting' is the process by which a futures contract is terminated by a transaction that is equal and opposite to the original transaction - State True or False? |
| True |
| False |
| Q 9. You are bullish on a stock but unsure of the overall market. The action you should take is : |
| Buy Stock futures and sell Index futures |
| Sell Index futures |
| Buy Stock Futures |
| None of the above |
| Q10.A trader sells a lower strike price CALL option and buys a higher strike price CALL option, both of the same scrip and same expiry date. This strategy is called ____. |
| Bearish Spread |
| Bullish Spread |
| Long term Investment |
| Butterfly |