NISM VIII MOCK TEST-1

Derivatives refer to—

Which of the following gives the person right to sell an underlying?

A trader has a bullish view on underlying and wants to create a bullish vertical spread which of the following he can do:

—— are the maximum exposure levels which the entire market can go up to and each Clearing Member or investor can go up to.

In case of financial market —- is a portfolio of securities that represent a particular market

— is used to determine initial margins on various positions, its basic objective is to determine the largest possible loss that a portfolio might reasonably be expected to suffer from one day to the next.

You sold two PQR Stock Futures contract at Rs. 280and the lot size is 1,500. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 260?

—- involves combination of options having same underlying but different expiries as well as different strikes.

. Who is eligible for clearing trades in index options?

—position is a combination of two positions in futures on the same underlying – long on one maturity contract and short on a different maturity contract.

The buyer of an option has a right in the option contract. For owning this right he pays a price to the seller of this right called —

You have taken a short position of one contract in June MNO futures (contract multiplier 50) at a price of Rs. 3400. When you closed this position after a few days and you realized that you made a profit of Rs. 15000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.)

Which of the following can be a underlying asset in derivative?

In case of future since profits and losses are settled on day-to-day basis who collects these margins from the loss making participants and pays to the gainers on day-to-day basis.

Value-at-risk provides the ______________.

In case of long straddle strategy maximum loss will be equal to —

You bought a Put option on a share. The strike price of the put was Rs245 and you paid a premium of Rs 49. Theoretically, what can be the maximum loss on this position?

Which of the following is not an Exchange traded derivative?

Final settlement price of option is the —- of the underlying security in the Capital Market segment across exchanges on the last trading day of the options contract.

Which of the following statement is correct?

Which of the following has Non-linear pay off

Which of the following are the objectives of SEBI?

—– involves two options of different strike prices and same maturity

. Current Price of XYZ Stock is Rs 385. Rs. 400 strike call is quoted at Rs 45. What is the Intrinsic Value?

— is a contract that gives the right, but not an obligation to buy or sell the underlying on or before a stated date and at a stated price.

If an index is constructed by method of market capitalisation which of the following is correct?

In case of futures profits and losses are settled on day-to-day basis called—

If you have sold a WQY futures contract (contract multiplier 40) at 2800 and bought it back at 3000. What is your gain/loss?

Under —- contract both the parties both the parties are most likely obliged to go through with the contract irrespective of the value of the underlying asset at the point of delivery.

Initial margin requirements are based on— value at risk over a one-day time horizon.

Under cash and carry model the future fair price is:

If you sell a put option with strike of Rs 855 at a premium of Rs.55.How much is the gain if the spot price is Rs890 that you may have on expiry of this position?

Under which of the option the option holder can exercise his right at any time on or before the expiry date/day of the contract.

What are the risk management measures taken to manage risk in derivative segment:

—-refers to when securities professionals making unnecessary and excessive trades in customer accounts for the sole purpose of generating commissions.

Which of the following try to predict the future movements in prices of underlying assets and based on the view they take positions in derivative contracts?

The sales agent should NOT poses following qualities:

. A trader has bought 100 shares of XYZ at Rs 985 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs2500 on this long position in XYZ. What should the trader do?

Which of the following is required to pay the initial margin?

When two opposite positions (one long and one short) are taken either in two contracts with same maturity on different products is known as:

Which of the following is an condition to say arbitrage occur?

Call option intrinsic value refers to:

Which of the following is the objective of Trade Guarantee Fund?

You buy call at strike price of $942 and paid premium of $25 each and the spot price is $970. The call is

Hedge ratio=

Which of the following is least likely a reason why trading in derivative is preferred over trading in underlying asset?

Higher the return an investor expect, higher the level of risk involved. This is known as:

In butterfly strategy to put a limit on unlimited loss trader along with short straddle can:

Trading member are member of:

Which of the following is correct for impact cost?

If you sell a put at strike price $450 and received a premium of $20 and if current strike price is $ 425. The call is:

Daily settlement price for futures contracts shall be based on the:

—-involves disguising financial assets so that they can be used without detection of the illegal activity that produced them.

Initial margin collection is monitored by the _________.

—- is minimum move allowed in the price quotations.

Current Price of XYZ Stock is Rs 350. Rs. 295 strike call is quoted at Rs 40. What is the BEP and profit or loss?

— is issued by the members of Exchanges and contains important information on trading in Equities and F&O Segments of exchanges.

If you sell a call option what is your maximum possible profit and loss:

—- are responsible to collect and settle the daily MTM profits/losses incurred by the TMs and their clients clearing and settling through them.

According to expectancy model which of the following is true for futures?

Under which of the following is person obliged to buy the underlying?

Which of the following are compliance requirement which need to be filled in Client broker relationship?

Which of the following is required to pay option margin?

An option with a delta of 0.75 will increase in value approximately by how much if the underlying share price increases by Rs 6?

Index derivatives are most useful as a tool to hedge against the—

Which of the following are cases in which complaint cannot be filed against trading member?

If futures price is higher than spot price of an underlying asset, market participants may expect the spot price to go up in near future. This expectedly rising market is called—

— is an order to buy or sell a contract at the best bid/offer price currently available in the market.

Which of the following is a feature of future contract?

If all other factors affecting an option’s price remain same, the time value portion of an option’s premium will decrease with the passage of time. This is known as:

Systematic risk is separable from investment and tradable in the market with the help of—

Mr Y short sell 100 stocks of TYI Ltd. Now to hedge himself from loss which may occur from his position he may:

In order books the order are stored in which sequence:

—-is a quasi-judicial process of settlement of disputes between Trading Members, Investors, Clearing Members and also between Investors and Issuers.

Which option pricing model is referred here :The price evolution of the option’s underlying asset, at equally-spaced time steps from today under the assumption that at each step, the price can only move up and down at fixed rates and with respective simulated probabilities.

Which of the following are functions performed by clearing members?

Which is the ratio of change in option premium for the unit change in price of underlying?

Which is the ratio of change in delta with respect to change in price of the underlying asset?

Mark-to-market margins are collected ___________.

Whicho f the following is correct regarding the settlement basis of future contract?

—-as a legal counterparty to all trades on this segment and also guarantees their financial settlement.

—may clear and settle their own proprietary trades, their clients’ trades as well as trades of other TM’s & Custodial Participants.

Final Exercise settlement price for an option contract shall be based on the:

Any person who has a grievance against a listed company or against any market intermediary can file a complaint using—–

If a person is bullish on the stock in long run but wants to hedge himself against short term downside movement in stock price for this he can do:

You write 10 future contract of lot size 30 at strike price of $525 if current price is $584 your pay off will be:

If you short stock and long call and short stock it is an:

—is the relationship between futures prices and spot prices.

A protective put can be created by:

Covered call strategy involves:

Trading Members are required to maintain trade confirmation slips and exercise notices from the trading system for a period of—

If the strike price of a put option decreases, the value of put option will:

— is the risk of an economic loss from the failure of counterparty to fulfil its contractual obligation.

Which of the following is required for a contract in derivative to be a legal and valid contract?

The option buyer and seller both are required to pay option value.

Clients may trade through various trading members but settle through a single clearing member.

Out of the money option premium only include time value of option.

Members and authorized dealer have to provide collateral deposits to become members of the F&O segment.

Clearing corporation on a derivatives exchange becomes a legal counterparty to all trades and be responsible for guaranteeing settlement for all open positions.

The level of open interest indicates inefficiency in the market.