NISM Series XIII Mock Test 12

NISM Series XIII Exam | Mock Test 12

1 / 50

Which of the following segments of market participants are allowed to trade in currency futures?

A. Individual

B. NRIs

C. Corporates

D. All of the above

2 / 50

A call option gives the buyer the right to buy the underlying at market price

A. True

B. False

3 / 50

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

4 / 50

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

A. Yes

B. No

5 / 50

Delta for a put option buyer is positive

A. False

B. True

6 / 50

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

7 / 50

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

8 / 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

9 / 50

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

10 / 50

10.

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

A. Increase

B. Decrease

C. No change

11 / 50

11.

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

12 / 50

12.

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

13 / 50

13.

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

A. True

B. False

14 / 50

14.

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

15 / 50

15.

What is the time value of a put option with a premium of Rs 162.80 & an intrinsic value of Rs 82.30?

A. Rs 80.50

B. Rs 84.90

C. Rs 124.50

D. Rs 177.60

16 / 50

16.

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

17 / 50

17.

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

18 / 50

18.

The margining system for index futures is based on

A. Margin at Risk

B. Price at Risk

C. Value at Risk

D. Volume at Risk

19 / 50

19.

Can a long position in a Put option can be closed out by taking a short position in a call option with identical exercise date and exercise price?

A. Yes

B. No

20 / 50

20.

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

21 / 50

21.

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

22 / 50

22.

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

23 / 50

23.

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

24 / 50

24.

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

25 / 50

25.

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

26 / 50

26.

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

27 / 50

27.

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

28 / 50

28.

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

29 / 50

29.

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

30 / 50

30.

What will be the Delta for a Far Out of The Money option?

A. Near 1

B. Near -1

C. Near 2

D. Near 0

31 / 50

31.

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

A. Weekly

B. Monthly

C. Three-month trading cycle

D. Quarterly

32 / 50

32.

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

33 / 50

33.

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

A. American option

B. European option

34 / 50

34.

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

35 / 50

35.

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

A. True

B. False

36 / 50

36.

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

A. True

B. False

37 / 50

37.

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

38 / 50

38.

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%

39 / 50

39.

A dealer can define exposure limits for the branches of the firm

A.True

B. False

40 / 50

40.

Mr. Ashu has bought 100 shares of ABC at Rs 980 per share. He expects the price to go up but wants to protect himself if price falls. He does not want to lose more than Rs 1000 on his long position in ABC. What should he do?

A. Place a stop loss order for 100 shares of ABC at Rs 990 per share

B. Place a stop loss order for 100 shares of ABC at Rs 970 per share

C. Place a limit buy order for 100 shares of ABC at Rs 990 per share

D. Place a limit sell order for 100 shares of ABC at Rs 970 per share

41 / 50

41.

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

42 / 50

42.

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

A. True

B. False

43 / 50

43.

If an investor holds a nifty put option with a strike price of 18400 & the current spot price is 18500, what is the options intrinsic value?

A. 0

B.100

C. -100

D. 18400

44 / 50

44.

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

45 / 50

45.

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

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.

The risk that cannot be controlled by diversification of a portfolio is _____

A. Systematic Risk

B. Unsystematic Risk

C. Credit Risk

D. Operational Risk

48 / 50

48.

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

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.

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

A. Vega

B. Delta

C. Gamma

D. Theta

Your score is

The average score is 78%

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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