NISM Series XIII Mock Test 14

NISM Series XIII Exam | Mock Test 14

1 / 50

If the shape of the term structure is Normal, it implies that

A. Rate is same for all terms

B. Rate is high for medium term and falls off on either side

C. Rate falls with the term

D. None of the above

2 / 50

Closing price of USDINR futures contract at the end of an active trading session will be calculated based on the

A. Weighted average of the last 30 trades done in the last 60 minutes

B.Weighted average of the last 5 trades done in the last 60 minutes

C. Weighted average of all the trades done in last 30 minutes

D. Simple average of last 30 trades done in the last 30 minutes

3 / 50

A seller of a call option can lose unlimited amount of money

A. True

B. False

4 / 50

4. Risk arrays for margin calculation are provided to members daily in a file called _____________.

A. SPAN file

B. SPAN Risk parameter file

C. Risk parameter file

D. Parameter file

5 / 50

Options contracts have two types of settlements: _______ premium settlement and final settlement

A. Daily

B. Weekly

C. Monthly

D. Quarterly

6 / 50

If an order does not find a match in the trading system, it is ____

A. Removed from the trading system after seven days

B. Removed from the trading system at the end of the day

C. Removed from the trading system on expiry day

D. Removed from the trading system when buyer/seller wishes

7 / 50

When the price of a future contract decreases, the margin account

A. Of the seller of futures contract will be credited for the gain

B. Of the buyer of futures contract will be debited for the loss

C. Both a and b

D. None of the above

8 / 50

True return can be calculated in advance for

A. Annuity

B. Zero coupon bond

C. Consols

D. Coupon bond

9 / 50

If a trader in the currency futures market expects INR will appreciate against USD, then he will buy USDINR

A. True

B. False

10 / 50

10.

____ measures the rate of change of option value to volatility of price of the underlying asset.

A. Delta

B. Gamma

C. Vega

D. Rho

11 / 50

11. ________ assume the price risk that hedgers attempt to lay off in the markets.

A. Speculators

B. Arbitrageurs

C. Hedgers

D. None of the above

12 / 50

12.

The economic role of derivatives is

A. Delta hedging

B. Financing

C. Consumption

D. Risk management

13 / 50

13.

____ are orders for which no price is specified at the time of the order is entered. For such orders, system determines the price

A. Market order

B. Limit order

C. Day order

D. Immediate order

14 / 50

14.

When a seller Short Sells a stock, it means ___

A. He has more than a month’s time to deliver the stock which he sold

B. He owns the stock he is supposed to deliver

C. He has to deliver the stock within short time

D. He does not own the stock he is supposed to deliver

15 / 50

15.

Megha wants to sell 34 contracts of ABC futures at Rs 2450 (contract multiplier is 50). Initial margin is 7%. How much will be the initial margin to be paid?

A. 4165000

B. 83300

C. 5831

D. 291550

16 / 50

16. On exercise of an option, the buyer/ holder will recognize premium as an_____________.

A. Expense

B. Income

C. Deferred Income

17 / 50

17.

Arbitragers take advantage of ______ in the markets

A. Volatility

B. Hedgers

C. Mispricing

D. Speculators

18 / 50

18.

Delta of a long call option or short put is always ___

A. Positive

B. Negative

C. Zero

D. None of the above

19 / 50

19.

Clearing Corporation protects itself from the counterparty credit risk and settlement risk from both buyer and seller by

A. Mark to market margins

B. Taking guarantee from trading members

C. Both a and b

D. None of the above

20 / 50

20.

A trading member has two clients : Client A and Client B. Client A has net long position of 12 and Client B has net short position of 10. What is the net position for trading member?

A. Long 2

B. Long 12

C. Short 10

D. Long 12 and Short 10

21 / 50

21.

3-month calendar spread for GBPINR is

A. 1000

B. 1500

C. 1800

D. 2000

22 / 50

22. Gaurav is bullish about HLL which trades in the spot market at Rs.210. He buys 10 three-month call option contracts on HLL with a strike of 230 at a premium of Rs.1.05 per call. At expiry, HLL closes at Rs. 250. Assuming 1 contract = 100 shares, his profit on the position is ________.

A. Rs. 18,950

B. Rs. 19,500

C. Rs. 10,000

D. Rs. 20,000

23 / 50

23.

A long position in futures market can be reversed only with the same counterparty from whom the contract was initially purchased.

A. True

B. False

24 / 50

24.

_____ are permitted to become trading and clearing members of the currency futures segment of the recognized stock exchange

A. Schedule banks

B. Urban cooperative banks

C. AD Category Banks

D. All of the above

25 / 50

25.

The initial margin is always equal to mark to market margin

A. True

B. False

26 / 50

26. For the currency pair, the standard practice is to write the BC code first followed by the QC code.

A. TRUE

B. FALSE

27 / 50

27. A Corporate manager is higher in the user hierarchy than the Branch Manager. True or False?

A. TRUE

B. FALSE

28 / 50

28. __________ can be bought and sold on an exchange like shares.

A. ETFs

B. Index Funds

C. Fixed deposits

D. None of the above

29 / 50

29.

_____ has the highest notional amount outstanding in world derivative market

A. Currency market

B. OTC

C. Equity market

D. Commodity market

30 / 50

30.

In a calendar spread transaction, the trader takes opposite positions in two futures contracts with ____

A. Two different underlying assets and same delivery month

B. Two different delivery months and two different underlying assets

C. Two different delivery months and same underlying asset

D. One stock and one index of same delivery months

31 / 50

31.

The Public Debt Office is the depository for

A. State Government Bonds only

B. Government Securities only

C. Bank Bonds only

D. All debt securities with face value above Rs 10,000 only

32 / 50

32.

The simultaneous purchase and sell of two different tenor futures contracts in the same underlying asset is known as _____

A. Limit order

B. Short hedge

C. Spread trade

D. Long hedge

33 / 50

33.

When the long term rate rises more as compared to short term rate, the shift in structure is

A. Steepening

B. Flattening

C. Parallel

D. None of the above

34 / 50

34.

In case of a member’s default, the Clearing Corporation cannot transfer client’s positions to another member or close out all open positions of defaulting member, without prior approval from SEBI

A. True

B. False

35 / 50

35.

Forward on interest rate is called

A. Interest rate futures

B. Interest rate swap

C. Bond futures

D. None of the above

36 / 50

36.

What is the maturity of the underlying for treasury bill futures in India?

A. 14 days

B. 182 days

C. 364 days

D. None of the above

37 / 50

37.

Contract size for currency future contract is ____

A. USD 100

B. USD 500

C. USD 1000

D. None of the above

38 / 50

38.

Mr. Govind thinks that the markets will go down, so he sells 10 lots of index futures at 3500. His predictions come true and the index falls, and Mr. Govind buys back the futures contracts at 3410. How much profit will he make if one lot of index is of 50

A. 35,000

B. 45,000

C. 55,000

D. None of the above

39 / 50

39.

What does a seller of a Put option expect?

A. An increase in the price of the underlying

B. No change in the price of the underlying

C. A decrease in the price of the underlying

D. Both a and b

40 / 50

40. In case of discount instruments it is possible to readily compute the true return or zero rate because there is ________.

A. Long term holding period

B. Return reinvestment

C. Pre-determined coupon payments

D. No interim return

41 / 50

41.

A Professional Clearing Member can execute trades for

A. Own account

B. Other trading members

C. Both a and b

D. None of the above

42 / 50

42.

Some months back, the 3 month rate was 8% and the 1 year rate was 8.8%. Currently the 3 month rate is 8.4% and 1 year rate is 8.9%. What is the shift of this term structure called?

A. Steepening

B. Flattening

C. Parallel

D. Vertical

43 / 50

43. What is the main purpose of SEBI's caution regarding past or expected returns from algo strategies?

A. To encourage investors to invest more in algo strategies.

B. To allow brokers to make claims about the potential returns from algo trading.

C. To ensure transparency and prevent misleading information.

D. To enable unregulated platforms to compete with SEBI-regulated ones.

44 / 50

44.

For a stop loss buy order, the trigger price is ___ the limit price

A. Less than

B. Greater than

C. Equal

D. None of the above

45 / 50

45.

Long and Short positions can be offsetted at ____, for proprietary trades

A. Across all trading members of a clearing member

B. Across all trading members

C. Trading member level

D. None of the above

46 / 50

46.

Which of these risks is most severe for Banks and Financial Institutions?

A. Interest rate risk

B. Currency risk

C. Equity risk

D. All of the above

47 / 50

47.

The accrued interest is paid by

A. Buyer to Seller

B. Seller to Buyer

C. Issuer to Buyer

D. Issuer to Seller

48 / 50

48. In case of ________, the duration will be slightly less than its maturity.

A. Coupon bonds

B. Annuity bonds

C. Convertible bonds

D. Zero-coupon bonds

49 / 50

49.

As per RBI circular, the contract size for JPYINR is JPY _____

A. 100

B. 1000

C. 10000

D. 100000

50 / 50

50.

____ are agreements between two parties to exchange cash flows in the future according to a prearranged formula

A. Forward

B. Future

C. Options

D. Swaps

Your score is

The average score is 66%

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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