NISM Series XIII Mock Test 10

NISM Series XIII Exam | Mock Test 10

1 / 50

Which of the following acts is mainly responsible for governing the securities trading in India?

A. FEMA, 1999

B. SC(R)A 1956

C. SEBI Act

D. RBI Act

2 / 50

A trader buys a Put option of a stock at a strike price of Rs 600 at a premium of Rs 15. If the stock price closes at Rs 500, what is the Put buyer’s profit/loss for 100 shares?

A. Rs 8500 profit

B. Rs 8500 loss

C . Rs 1500 profit

D. Rs 1500 loss

3 / 50

Insurance companies are allowed to participate in interest rate futures only for _____.

A. Long Hedge

B. Short Hedge

C. Both A and B

D. None of the above

4 / 50

Which of the following best describes the difference between a European and an American option?

A. European options can be exercised only on expiry; American options can be exercised any time before or on expiry.

B. European options are physically settled, whereas American options are cash-settled.

C. American options are only traded in India; European options are not.

D. European options can be exercised multiple times, while American options cannot.

5 / 50

Which of the following accounting standards of Institute of Chartered Accountants of India (ICAI) defines the accounting for derivatives?

AS 6

AS 10

AS 9

AS 30

6 / 50

Which of the following represents the time value of an option?

A. Intrinsic Value – Premium

B. Premium – Intrinsic Value

C. Strike Price – Spot Price

D. Spot Price – Strike Price

7 / 50

Consider a scenario in which USDINR was quoting as 63.40/63.42 and EURUSD as 1.1450/1.1453 in the morning and by the day end USDINR moves to 63.10/63.12 while EURUSD moves to 1.1420/1.1422. What would best describe the movement of currency during the day?

A. USD has appreciated against INR and also appreciated against EUR

B. USD has depreciated against INR and also depreciated against EUR

C. USD has appreciated against INR and depreciated against EUR

D. USD has depreciated against INR and appreciated against EUR

8 / 50

A stock must meet the eligibility criteria for derivatives trading for a continuous period of six months to be selected

A. True

B. False

9 / 50

______ is true for exchange traded derivatives

A. bilateral trade settlement

B. It is only available in stocks and currencies

C. Centralized trade settlement

D. Decentralized counter party credit risk management

10 / 50

10.

If the EuroINR is equal to INR 70.25 and Bangladesi Taka EuroBTK exchange rate is BTK99.18, the cross rate INRBTK rate is

A. 1.4118 INR for BTK

B. 1.4118 BTK for INR

C. 0.708 BTK for INR

D. 0.708 INR for BTK

11 / 50

11.

Hedging for multiple bonds in a portfolio can be done by using _____

Year to maturity ratio

Market value ratio

Duration based hedge ratio

None of the above

12 / 50

12.

Regulations on buying and selling of T bills and T bond futures for NRIs and FII investors?

A. Can short sell freely

B. Can short sell with permission of SEBI

C. Cannot short sell

D. None of the above

13 / 50

13.

Margins in 'Futures' trading are to be paid by _______.

A. Only the buyer

B. Only the seller

C. Both the buyer and the seller

D. The clearing corporation

14 / 50

14.

What is the primary responsibility of Clearing Corporation in F&O segment of the exchange?

A. Clearing and settlement of all trades

B. Executing trades

C. Providing brokerage services

D. Managing market information

15 / 50

15.

Investors can have grievances against _______________.

A. Brokers

B. Intermediaries

C. Company

D. All of the above

16 / 50

16.

Which of the following example is of Market Making?

A. A real estate agent quoting a price to sell a bungalow

B. A jewellery store owner quoting a price to buy old jewellery and also quoting a price to sell new jewellery

C. A wholesale fruit vendor quoting price to sell fruits at low prices

D. A steel junk dealer quoting price to buy a very old car

17 / 50

17.

A European call option gives the buyer the right but not the obligation to buy from the seller an underlying at the prevailing market price "on or before" the expiry date.

A. True

B. False

18 / 50

18.

What is algorithmic trading?

A. Manual execution of trades by human operators

B. Automated execution of trades based on pre-programmed instructions

C. Trading based on insider information

D. Trading only during market opening hours

19 / 50

19.

Ms. Jaya buys 10 lots of USDINR 1-month futures when price was 65.00/65.10 and squares off 5 lots after a week when price was 65.15/65.35. What was her profit or loss?

A. -500

B. 500

C. 250

D. 1250

20 / 50

20.

In Bullish vertical spread using put strategy, trader _________?

A .buy put option with lower strike and sell a put option with higher strike

B. buy put option with higher strike and sell a put option with lower strike

C. Buy call with lower strike and sell a put option with higher strike

D. None of the above

21 / 50

21.

Which corporate action does not require adjustments to strike price, market lot and position?

A. Bonus

B. Stock splits

C. Consolidations

D. Ordinary dividends

22 / 50

22.

Option buyer faces ________ risk and option seller faces __________ risk.

A. Limited, Unlimited

B. Limited, Limited

C. Unlimited, Limited

D. Unlimited, Unlimited

23 / 50

23.

Which of the following best describes the guidelines with respect to nature of agreement that a sub-broker has to execute with his client?

A. Bipartite agreement between him and his client clearly specifying rights and obligations for each party

B. Bipartite agreement him and his client clearly specifying the brokerage to be charged

C. Tripartite agreement between him, broker and his client clearly specifying rights and obligations of each party

D. Tripartite agreement between him, broker and his client clearly specifying the rights of brokers but not his obligations

24 / 50

24.

The default mode of settlement in OTC spot market is ____

As decided by the merchants

Net settlement in cash

Always delivery based

None of the above

25 / 50

25.

Person goes short in a GBPINR futures contract at Rs.99.75 and on expiry GBPINR reference rate is Rs. 100.75, he will ________?

A. Make profit of Rs. 1

B. Make loss of Rs. 1

C. No profit no loss

D. None of the above

26 / 50

26.

What is the breakeven point (BEP) for a call option with a strike price of 17500 and a premium of 185?

A.17685

B.17500

C. 17300

D.17800

27 / 50

27.

In options trading, Gamma is best described as:

A. Change in option price due to time decay

B. Rate of change of Delta with respect to the price of the underlying

C. Sensitivity of option premium to interest rates

D. Change in Vega due to volatility

28 / 50

28.

A ________ order is classified as price related condition.

A. Market

B. Day

C. IOC

D. None of the above

29 / 50

29.

What is the settlement method for 91 day T-bill futures?

A. Cash

B. Physical

C. None of the above

30 / 50

30.

Value-at-risk measures ___________.

A. Value of proprietary portfolio

B. Risk level of a financial portfolio

C. Net-worth of an investor

D. Credit rating of an investor

31 / 50

31.

Mr. Singh from India invested USD 20000 in US equity markets at an exchange price of 60 for USDINR. After a year these investments grew to USD 23000. Mr. Singh then sold off the entire investments and repatriated his money to India. He found that his effective return (profit) was 20%. Calculate the exchange price which Mr. Singh received when he repatriated money to India.

A. 59.80

B. 60.56

C. 61.77

D. 62.61

32 / 50

32.

How are proprietary positions calculated for a Trading Member?

A. On a gross basis (buy + sell)

B. On a net basis (buy-sell)

C. By averaging the buy and sell quantities

D. By considering only the buy quantities

33 / 50

33.

What should happen if a client or trading member exceeds the client-level position limit?

A. They can continue trading as usual

B. They must immediately reduce their positions

C. They receive a warning without further action

D. They are exempt from any penalties

34 / 50

34.

A pension fund receives fixed at 7% and pays floating at MIBOR. If MIBOR falls to 5.80%, what is the fund’s net position per Rs 100 crores notional amount?

A. Rs 1.20 crores gain

B. Rs 1.20 crores loss

C. Rs 2.40 crores loss

D. Rs 2.40 crores gain

35 / 50

35.

A _________ is where a trader buys a particular month contract (Futures or Options) and sell (i.e., take an opposite position) of the same contract of a different month.

A. Calendar spread

B. Option spread

C. Contract spread

D. All of the above

36 / 50

36.

Guidelines for accounting of currency futures contracts are issued by ____

A. RBI

B. ICWAI

C. ICAI

D. Fx-CA

37 / 50

37.

The lot size for EURINR futures contract is

A. 10,000 EUR

B. 10,000 INR

C. 1,000 INR

D. 1,000 EUR

38 / 50

38.

An in-the-money option is _____________.

A. An option with a negative intrinsic value

B. An option which cannot be profitably exercised by the holder immediately

C. An option with a positive intrinsic value

D. An option with zero-time value

39 / 50

39.

Assume that the one-year interest rate is 1% in US, 2% in UK and 7% in India. If current GBPINR spot rate is 91.60, what would be the one-year future rate of GBPINR?

A. Higher than 91.60

B. Lower than 91.60

C. Equal to 91.60

D. Cannot be determined with the above data

40 / 50

40.

Clients' positions cannot be netted off against each other while calculating initial margin on the derivatives segment.

A. True

B. False

41 / 50

41.

At 11 am RBI announced the credit policy and a deduction in interest rates. Generally such a step will lead to ______ of rupees

A. Stengthening

B. Weakening

C. No effect

42 / 50

42.

You sold one XYZ Stock Futures contract at Rs. 278 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265?

A. 16,600

B. 15,600

C. -15,600

D. -16,600

43 / 50

43.

Which of the following Greeks measures the sensitivity of the option price to changes in the price of underlying asset?

A. Vega

B. Delta

C. Gamma

D. Theta

44 / 50

44.

An Indian company has both imports & exports in GBP of equal amounts. However, the export realization comes a week after the payments are made for imports. Which type of currency risk is the company facing?

A. Risk of INR depreciation

B. Risk of INR appreciation

C. Risk of forward premia

D. There is no currency risk

45 / 50

45.

Which type of option has the highest uncertainty regarding its moneyness due to small price movements in the underlying asset

A. ITM

B. ATM

C. OTM

46 / 50

46.

Unlike Options, future contracts gives the seller both rights and obligations

A. True

B. False

47 / 50

47.

A defaulting member's clients’ positions could be transferred to ____________ by the Clearing Corporation.

A. Another solvent member

B. The Exchange

C. A suspense account

D. Error account

48 / 50

48.

Generally, who are the market makers in OTC market for currency options?

A. Brokers

B. Banks

C. Exchanges

D. Agents

49 / 50

49.

A trader sells call options for 200 shares at Rs 370 strike price for premium of Rs 8 per share. If the stock closes at Rs 390, what is the net profit/loss in the call contract?

A. Rs 800 profit

B. Rs 800 loss

C. Rs 2400 profit

D. Rs 2400 loss

50 / 50

50.

Cash-and-carry arbitrage involves ____

A. Buying a futures contract and holding it until expiry

B. Selling a stock in the cash market and buying a futures contract

C. Shorting a futures contract and waiting for the price to go up

D. Buying a stock in the cash market and selling a futures a contract

Your score is

The average score is 74%

This NISM Series XIII mock test will help you familiarize yourself with the exam format, assess your knowledge, and identify areas that may need further study.

Remember that while mock tests can benefit practice, it’s important to understand the concepts and principles behind each question thoroughly.

Good luck with your preparation for the NISM Series XIII (Derivatives) exam!

Mock Test 1 | Mock Test 2 | Mock Test 3 | Mock Test 4 | Mock Test 5 | Mock Test 6 | Mock Test 7 | Mock Test 8 | Mock Test 9 | Mock Test 10

For the latest and most accurate information, please visit the NISM website at https://certifications.nism.ac.in/nismaol/.

We are given:

Step 1: Initial investment in INR

Step 2: Final amount in INR (after 20% profit)

Step 3: Final USD amount = 23,000. Let exchange rate = X

Good luck with your preparation for the NISM Series XIII (Derivatives) exam!

Mock Test 1 | Mock Test 2 | Mock Test 3 | Mock Test 4 | Mock Test 5 | Mock Test 6 | Mock Test 7 | Mock Test 8 | Mock Test 9 | Mock Test 10