NISM Series VIII - Equity Derivatives Paper - 28
| Q 1. In the futures market, the basis is referred to as _____. |
| The beta of the future stock |
| The volatility of the market |
| The price difference between Spot and Future price |
| The Bid-Ask price |
| Q 2.You have sold one lot of JSW Steel futures for Rs 300 (lot size 2000) expecting that this share price will go down. But you also want to protect yourself against any loss of more than Rs 10,000. What should you do? |
| Place a limit order to buy at Rs 305 |
| Place a stop-loss buy order at Rs 295 |
| Place a stop-loss buy order at Rs 305 |
| Place a limit sell order at Rs 305 |
| Q3.You sold a call option on a share. The strike price of the Call was Rs 250 and you received a premium of Rs 16 from the option buyer. What can be the maximum loss on this position? |
| Unlimited |
| Zero |
| Rs. 250 |
| Rs. 234 |
| Q4.Option contracts can be settled ____ . |
| in cash or settled by delivery depending on the terms of the contract |
| in cash or settled by delivery depending on the choice of the buyer |
| in cash or settled by delivery depending on the choice of the seller |
| None of the above |
| Q5.The risk-return profile of an option contract is ___. |
| symmetric |
| asymmetric |
| like treasury bond |
| like mutual funds |
| Q6.In general, terms, if the number of participants in a market is more, the liquidity will be low - State True or False? |
| True |
| False |
| Q7.When compared to the cash market, there are more chances that an investor does not properly understand the risks involved in the derivatives market. True or False? |
| True |
| False |
| Q8.Clearing Corporation of an Exchange guarantees performance of exchange-traded contracts - State whether True or False? |
| True |
| False |
| Q9.Mr. Sunil places a stop loss sell order on ABC stock with a trigger price of Rs. 450. The current market price of ABC stock is Rs 470. The order will be released for execution ___ |
| As soon as the market price of ABC touches Rs. 470 |
| As soon as the market price of ABC touches Rs. 450 |
| As soon as the order is placed in the system |
| If similar orders are available in the order book at Rs. 450 |
| Q10.In a Derivatives Market, the person who takes the risk is ____ |
| Arbitrageurs |
| Speculators |
| Hedgers |
| None of the Above |