NISM Series XIII Mock Test 11

NISM Series XIII Exam | Mock Test 11

1 / 50

What is the basis for the final price at which a treasury bill futures contract is settled?

A. The price is linked to the auction price of treasury bill

B. The price is the daily settlement price for that day

C. The price is fixed by FIMMDA

D. The price is fixed by FEDAI

2 / 50

What is the net payoff for Ms. Sakshi, who purchased a Rs 21.50 strike call option for Rs 0.20, if the underlying bond price closes at Rs 21.70 on the expiry date?

A. 0.20

B. 0.40

C. -0.20

D. 0

3 / 50

For the open positions on last trading day, the seller must notify the Clearing Corporation his intention to deliver by the close of ____

A. Last trading day

B. Two business days prior to the last business day (expiry day) of the contract month

C. Both a and b are same

D. None of the above

4 / 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

5 / 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

6 / 50

A naked position involves holding an equivalent position in the underlying asset

A. True

B. False

7 / 50

A shift where interest rates across all maturities change by the same amount and in the same direction is called a _____

A. Perpendicular shift

B. Vertical shift

C. Parallel shift

D. Steepening shift

8 / 50

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

9 / 50

On final settlement, the buyer/holder of the option will recognise the favorable difference received from the seller/writer as ____ in the profit and loss account

A. Income

B .Expense

C. Loan

D. Amortization

10 / 50

10.

Which of the following is true about the payoff of a short call option position?

A. The maximum loss is zero

B. The maximum profit is unlimited

C. The maximum profit is limited to the premium received

D. The maximum loss is limited to the premium received

11 / 50

11.

Execution of Power of attorney by the client in favor of stockbroker is _____

A. Mandatory at the time of placing an order

B. Mandatory at the time of KYC

C. Optional

12 / 50

12.

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

13 / 50

13.

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

14 / 50

14.

Ms Rekha wants to sell on a futures market. For this, she _______

A. need not own the underlying

B. must own the underlying

C. must own at least 25% of the underlying

D. must own at least 50% of the underlying

15 / 50

15.

Ms Alia takes two positions: buying a call option (strike Rs 150, premium Rs 0.30) and buying a Put option (strike Rs 150, premium Rs 0.20). Determine her net profit or loss if the underlying asset’s price at expiry is Rs 149.50.

A. 0.20

B. -0.20

C. 0

D. 0.50

16 / 50

16.

What is the contract trading cycle for stock options contracts on NSE?

A. Weekly

B. Monthly

C. Three-month trading cycle

D. Quarterly

17 / 50

17.

The effect of reinvestment risk on bond returns is _____

A. Slow and over a period of time

B. Immediate and Instant

C. Nil impact

D. None of the above

18 / 50

18.

A Derivative market helps in transferring the risk from

A. Speculators to Hedgers

B. Arbitragers to Hedgers

C. Speculators to Arbitragers

D. Hedgers to Speculators

19 / 50

19.

Repo transaction means ____

A. Borrowing security and lending money

B. Borrowing money and lending security

C. Both of the above

D. None of the above

20 / 50

20.

What is the Market-Wide Position Limit (MWPL) for futures and options contracts on individual securities?

A. 10% of the number of shares held by non-promoters

B. 20% of the number of shares held by non-promoters

C. 15% of the number of shares held by non-promoter

D. 25% of the number of shares held by non-promoters

21 / 50

21.

A call option seller’s maximum gain occurs when the Index closes at or below the option’s

A. Premium

B. Strike price

C. Breakeven poin

D. Intrinsic value

22 / 50

22.

An Indian investor has invested Rs 340000 in US securities. At the time of investment, the exchange rate was 74. Two years later, he noticed that his investment has gained 20% in USD terms and liquidated his investment. He repatriated the money to India at the then existing exchange rate of 72. What would be the real returns (returns in INR terms)?

A. Loss of 6.88%

B. Loss of 15.55%

C. Profit of 16.75%

D. Profit of 19.64%

23 / 50

23.

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

24 / 50

24.

Identify the contract which is cleared and settled bilaterally

A. A one-month Nifty futures contract

B. A month USDINR options contract

C. a 3-month forward contract to buy Swiss Francs against INR

D. a one-month GOI bond futures contract

25 / 50

25.

Delta for a put option buyer is positive

A. False

B. True

26 / 50

26.

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

27 / 50

27.

Limitation of Interest Rate Derivatives for Hedgers is mainly due to ____

A. Standardised Contract

B. Non availability on all kind of underlying instruments

C. Both of the above

D. None of the above

28 / 50

28.

Can one sell assets in futures market even if he does not own any such assets?

A. Yes

B. No

29 / 50

29.

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

30 / 50

30.

A Professional Clearing Member of derivatives segment _______

A. should also be a member of cash segment

B. should also become a member of the cash segment within 2 years

C. provides trading facility to its clients

D. does not have any trading rights

31 / 50

31.

Speculators are those who take risk whereas hedgers are those who wish to reduce the risk

A. True

B. False

32 / 50

32.

The key variable(s) affecting an option’s price is/are ____

A. The spot price of underlying asset

B . The time to expiration

C. The strike price of an option

D. All of the above

33 / 50

33.

______ measures the sensitivity of an option’s price to changes in market volatility

A. Vega

B. Delta

C. Gamma

D. Theta

34 / 50

34.

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

35 / 50

35.

Assume that the regulator has stipulated a minimum margin of Rs 200, the clearing corporation can change it to ____

A. Any amount above Rs 200

B. Any amount below Rs 200

C. Either a or b as it sees fit

D. Any amount between rs 150 to rs 200

36 / 50

36.

How is the forward contract, which is for hedging purpose, accounted for in books of accounts?

A. The premium or discount will be shown in the Profit and Loss Account

B. The premium or discount will be ignored for accounting

C. The premium or discount will be amortized over the life of the contract

D. No premium or discount will be recognized in books of accounts

37 / 50

37.

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

38 / 50

38.

According to the Securities Contracts (Regulation) Rules, 1957, what is the minimum age for an individual to become a trading member?

A. 18 years

B. 21 years

C. 20 years

D. 25 years

39 / 50

39.

Position Limit for a Non Bank TM on EURINR is __________.

A. 15% of total open interest or EURO 25 mn, whichever is higher

B. 6% of total open interest or EURO 25 mn, whichever is higher

C. 15% of total open interest or EURO 5 mn, whichever is higher

D. None of the above

40 / 50

40.

Higher the strike price, the premium on call option will decrease

A. True

B. False

41 / 50

41.

What is the primary purpose of upfront initial margin required by Clearing Corporations for futures and options contracts?

A. To facilitate cash settlemen

B. To fund market research

C. To cover trading fees

D. To ensure capital adequacy

42 / 50

42.

Which of the following must be specified when submitting a trade order for it to be executed?

A. Market Side: buy or sell

B. Whether the trade is Proprietary or Client order

C. The quantity to buy or sell

D. All of the above

43 / 50

43.

What is an open position in a derivatives market?

A. An unsettled long position

B. An unsettled short position

C. Either an unsettled long or short position

D. A settled short position

44 / 50

44.

All the 50 stocks of NSE NIFTY index are equally weighted while calculating the index.

A. True

B. False

45 / 50

45.

In India, the clearing and settlement of derivatives trades would be through _____

A. SBI

B. Euroclear

C. SEBI approved Clearing Corporation / Clearing House

D. The Interbank Clearing House

46 / 50

46.

On which day does government of India conducts auction for treasury bills?

A. Monday

B. Tuesday

C. Wednesday

D. Thursday

47 / 50

47.

When the volatility of underlying stock decreases, the premium of its call option will ____

A. Increase

B. Decrease

C. No change

48 / 50

48.

You sold a put option on a stock. The strike price of the put was Rs 300 and you received a premium of Rs 35. Theoretically, what can be the maximum loss in this position?

A. 0

B. 300

C. 265

D. 35

49 / 50

49.

Can a Clearing Member give Fixed Deposits as part of liquid assets to the Clearing Corporation?

A. YES

B. NO

50 / 50

50.

____ allows the holder to exercise the option at any time before expiry

A. American option

B. European option

Your score is

The average score is 76%

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!

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

NISM Series XIII Mock Test 11

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!

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