NISM Series XIII Mock Test

Free NISM Series XIII Mock Test – Practice for Exam Success

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NISM Series XIII Mock Test 1

NISM Series XIII Exam | Mock Test 1

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1. In India, index derivatives are available on:

2 / 50

2. Which one is true about SEBI’s regulation on derivatives?

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3. The counterparty risk in exchange-traded derivatives is borne by:

4 / 50

4. Which group is NOT allowed to take speculative positions?

5 / 50

5. The expiry day for equity derivatives in India is:

6 / 50

6. Profit for call option buyer =

7 / 50

7. Which of these is NOT a characteristic of a forward contract?

8 / 50

8. If a future price is rising and open interest is also increasing, what does this indicate?

9 / 50

9. Which of the following is true about put options?

10 / 50

10. Which of the following instruments is used for hedging index exposure?

11 / 50

11. A trader sells a future and buys the same stock. He is:

12 / 50

12. 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 ?

13 / 50

13. Which of the following is a Bullish strategy?

14 / 50

14. If spot = ₹100 and futures = ₹110, arbitrageur will:

15 / 50

15. Exposure margin is collected for:

16 / 50

16. Maximum loss for a short straddle is:

17 / 50

17. Mark-to-market margin is calculated:

18 / 50

18. What should the affected stock exchange do to restore normalcy of operations during an outage?

19 / 50

19. A Currency exchange trading member buys 20 lots of USDINR one month futures on day 1 at 65.80 and also sells 4 lots of the same contract on the same day at 65.90 in the proprietary book. The settlement price for the day was 65.80. What would be mark to market (MTM) margin on the open positions (in Rs.) ?

20 / 50

20. Which strategy benefits from both upward and downward movements?

21 / 50

21. Which one of the following statements is FALSE?

22 / 50

22. 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 the Trading Member?

23 / 50

23. The yield to maturity amortizes the capital gain or loss at redemption over the bond's life and adds it to the _______.

24 / 50

24. Who is a hedger in the derivatives market?

25 / 50

25. Arbitrage means:

26 / 50

26. A call option gives the holder the:

27 / 50

27. The initial margin is collected to:

28 / 50

28. If a put is bought at ₹10 premium with a strike of ₹100 and spot is ₹85 at expiry, profit =

29 / 50

29. If index is volatile, the SPAN margin will:

30 / 50

30. Long straddle involves

31 / 50

31. The ____________ model was developed by William Sharpe in 1978.

32 / 50

32. The futures hedge is simultaneously exposed to both basis risk and yield curve spread risk.

33 / 50

33. The investor has the right to demand prepayment on specified dates before maturity in case of _______.

34 / 50

34. ______ specifies how to convert the payment period into year fraction.

35 / 50

35. A speculator's aim in derivatives is to:

36 / 50

36. Which of the following is NOT an example of a derivative?

37 / 50

37. Hedging using futures helps to:

38 / 50

38. If futures price are lower than the spot price of an asset, market participants may expect the spot price to come down in the future. This situation is called -

39 / 50

39. A covered call strategy involves:

40 / 50

40. A speculator aims to:

41 / 50

41. Which of these best defines basis in futures trading?

42 / 50

42. Futures trading helps in:

43 / 50

43. Put option is in-the-money when:

44 / 50

44. The interest rate on ______ is the benchmark for determining the interest rate on other debt instruments.

45 / 50

45. Which of these is true about a European Option?

46 / 50

46. Shorting in derivatives means:

47 / 50

47. A put option becomes profitable when:

48 / 50

48. Which strategy profits from low volatility?

49 / 50

49. Margin money in futures contracts is meant to:

50 / 50

50. If Delta = 0.6, spot moves ₹10, option premium moves:

Your score is

The average score is 59%

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NISM Series XIII Mock Test 2

NISM Series XIII Exam | Mock Test 2

1 / 50

1. Option premium =

2 / 50

2. If underlying stock falls, the price of a call option:

3 / 50

3. A hedger uses derivatives to:

4 / 50

4. Which type of trader uses technical indicators for entry/exit?

5 / 50

5. A bullish investor should ideally:

6 / 50

6. If Vega is high, then:

7 / 50

7. If option delta = 0.6 and stock rises by ₹10, option gains by:

8 / 50

8. Which one is a synthetic long call strategy?

9 / 50

9. An investor has a long call with strike ₹100 and premium ₹5. Breakeven =

10 / 50

10. A trader shorted a future at ₹1,000. Price rose to ₹1,050. The loss is:

11 / 50

11. If an investor has grievances, they should approach:

12 / 50

12. Investor protection fund is maintained by:

13 / 50

13. Which of these documents is mandatory for derivative account opening?

14 / 50

14. A person can trade in derivatives only through:

15 / 50

15. AML stands for:

16 / 50

16. Securities Transaction Tax (STT) is levied on:

17 / 50

17. Derivative contracts must be:

18 / 50

18. Penalty for insider trading is governed under:

19 / 50

19. Which act empowers SEBI to regulate securities markets?

20 / 50

20. Which of these regulators governs derivatives trading in India?

21 / 50

21. The role of the Clearing Corporation includes all EXCEPT:

22 / 50

22. If a clearing member defaults, the risk is handled by:

23 / 50

23. Final settlement price of index futures is based on:

24 / 50

24. Funds and securities are transferred between:

25 / 50

25. Which of the following ensures trade matching and settlement?

26 / 50

26. Clearing members are responsible for:

27 / 50

27. SPAN margin is used to:

28 / 50

28. What is the role of conversion factor in IRF delivery?

29 / 50

29. Daily margin collected to cover mark-to-market losses is called:

30 / 50

30. Which institution guarantees settlement in exchange-traded derivatives in India?

31 / 50

31. Cost of carry can be negative when:

32 / 50

32. What happens to cost of carry as time to expiry increases?

33 / 50

33. The no-arbitrage price of a future assumes:

34 / 50

34. Dividend yield impacts which type of futures pricing most directly?

35 / 50

35. Reverse cash-and-carry arbitrage is used when:

36 / 50

36. Cash-and-carry arbitrage is possible when:

37 / 50

37. Which of the following is true for index futures?

38 / 50

38. If the interest rate increases, futures prices:

39 / 50

39. An institution buys a put option on 10Y G-Sec at strike 98. If price falls to 96, what is the intrinsic value?

40 / 50

40. The futures price is generally:

41 / 50

41. An investor expecting high volatility but uncertain direction may choose:

42 / 50

42. Which of these losses cannot be offset against derivative income?

43 / 50

43. Rho measures the sensitivity of an option to changes in:

44 / 50

44. Gamma is highest when the option is:

45 / 50

45. How many serial weekly and monthly contracts are there in the contract cycle for S&P BSE Sensex futures?

46 / 50

46. Vega measures sensitivity of option premium to changes in:

47 / 50

47. Delta of a call option is typically:

48 / 50

48. If the strike price of a call is ₹200 and the spot price is ₹250, the option is:

49 / 50

49. Which of the following decreases as expiration approaches, assuming all else remains constant?

50 / 50

50. Time value of an option is highest when:

Your score is

The average score is 67%

0%

NISM Series XIII Mock Test 3

NISM Series XIII Exam | Mock Test 3

1 / 50

1. A ‘naked position’ in futures refers to:

2 / 50

2. In futures trading, ‘initial margin’ refers to:

3 / 50

3. In a long position in futures, you benefit when:

4 / 50

4. What is ‘tick size’?

5 / 50

5. Which of these is a key feature of futures markets?

6 / 50

6. The difference between futures price and spot price is known as:

7 / 50

7. The price at which the underlying asset is traded in the spot market is called:

8 / 50

8. Futures contracts are settled:

9 / 50

9. Which of the following is NOT true about forwards contracts?

10 / 50

10. A good index must be:

11 / 50

11. An Exchange Traded Fund (ETF):

12 / 50

12. What are index derivatives?

13 / 50

13. Free-float methodology includes only:

14 / 50

14. What is “Impact cost” in the context of an index?

15 / 50

15. Which of the following is a key application of indices?

16 / 50

16. Which type of index weights each company equally?

17 / 50

17. Nifty and Sensex originally followed which methodology?

18 / 50

18. Which index gives more weight to higher-priced stocks?

19 / 50

19. A stock market index reflects:

20 / 50

20. In futures, margin is paid by:

21 / 50

21. Which of the following derivative instruments has optionality?

22 / 50

22. In India, exchange-traded equity derivatives started in:

23 / 50

23. Put option gives the buyer the right to:

24 / 50

24. Call option gives the buyer the right to:

25 / 50

25. Interest Rate Swaps involve:

26 / 50

26. What is a swap?

27 / 50

27. Which of these is a bilateral, customized contract?

28 / 50

28. Which risk involves default by the counterparty?

29 / 50

29. What is the main purpose of a hedger in derivatives?

30 / 50

30. Which of the following is a characteristic of futures contracts?

31 / 50

31. Who eliminates price discrepancies across markets in derivatives?

32 / 50

32. Which is a customized OTC contract?

33 / 50

33. Which of the following is NOT an underlying asset in derivatives?

34 / 50

34. What is a derivative?

35 / 50

35. SEBI Act was enacted in:

36 / 50

36. Which committee recommended the use of VaR methodology for margins?

37 / 50

37. Which act regulates derivatives under Indian law?

38 / 50

38. In put-call parity, the formula is:

39 / 50

39. Which option pricing model is used primarily for European options?

40 / 50

40. In a call option, the buyer has the right to:

41 / 50

41. What is the ‘basis’ in futures trading?

42 / 50

42. Which of these features is NOT associated with futures contracts?

43 / 50

43. Forwards contracts are typically traded in:

44 / 50

44. Which financial instrument is based on an index as an underlying asset?

45 / 50

45. Which is NOT an attribute of a good market index?

46 / 50

46. Which index type is most influenced by the stock’s market capitalization?

47 / 50

47. Which risk involves the chance of a counterparty failing to fulfill contractual obligations?

48 / 50

48. Which category of market participants seeks to reduce risk exposure?

49 / 50

49. Which of the following is NOT an example of a derivative instrument?

50 / 50

50. What is a derivative?

Your score is

The average score is 76%

0%

NISM Series XIII Mock Test 4

NISM Series XIII Exam | Mock Test 4

1 / 50

What does ‘open interest’ refer to?

2 / 50

The cash-and-carry model assumes:

3 / 50

Pay-off for futures contract is:

4 / 50

A positive basis means:

5 / 50

What is “mark-to-market” in futures?

6 / 50

Which of the following is a type of option with same strike but different expiries?

7 / 50

Which of the following options has intrinsic value if Spot > Strike?

8 / 50

European options can be exercised:

9 / 50

Which of the following is true about a call option buyer?

10 / 50

A short futures position profits when:

11 / 50

The ‘Vega’ of an option measures sensitivity to:

12 / 50

Which of the following measures time decay of an option?

13 / 50

Option premium consists of:

14 / 50

A ‘put option’ gives the holder the right to:

15 / 50

In secondary market, the price at which the bond is settled is the _______.

16 / 50

Which is a non-directional options strategy?

17 / 50

Option seller’s maximum profit is:

18 / 50

If the call option is in-the-money, its intrinsic value is:

19 / 50

Which of these reflects rate of change in Delta?

20 / 50

When strike price equals spot price, the option is:

21 / 50

What is an IOC order?

22 / 50

A Trading-cum-Clearing Member (TCM) can clear trades for:

23 / 50

Who is responsible for clearing and settling trades?

24 / 50

What is the trading time for equity derivatives in India?

25 / 50

Short straddle profits when:

26 / 50

Which window in the Trader Workstation shows current bids and offers?

27 / 50

Which entity in the trading hierarchy has full access across branches?

28 / 50

What happens if an order exceeds circuit filter limits?

29 / 50

Client orders must be marked as:

30 / 50

Which type of order executes at the best available price?

31 / 50

Extreme loss margin is based on:

32 / 50

SPAN is used for calculating:

33 / 50

What is the final settlement day for index options?

34 / 50

The adjustment factor for a stock which issued rights in the ratio A:B is __________.

35 / 50

Which organization guarantees financial settlement in derivatives?

36 / 50

Which of the following is NOT a major global currency?

37 / 50

Daily MTM for futures is settled in:

38 / 50

Calendar Spread Margin is charged on:

39 / 50

What is the minimum Liquid Net Worth for a Clearing Member?

40 / 50

Which of the following qualifies as Liquid Assets for margin?

41 / 50

Which currency is considered a ‘safe haven’?

42 / 50

An increase from 82 to 83 in USDINR indicates:

43 / 50

What is the base currency in USD/INR?

44 / 50

Which of these currency regimes is used in India?

45 / 50

The most traded currency pair is:

46 / 50

Currency futures are:

47 / 50

Which of the following affects exchange rates?

48 / 50

In currency markets, the spread refers to:

49 / 50

Cross currency rate is calculated using:

50 / 50

Spot settlement in currency market is usually:

Your score is

The average score is 69%

0%

NISM Series XIII Mock Test 5

NISM Series XIII Exam | Mock Test 5

1 / 50

Currency futures are:

2 / 50

Which of the following affects exchange rates?

3 / 50

In currency markets, the spread refers to:

4 / 50

Cross currency rate is calculated using:

5 / 50

The underlying in a currency future is:

6 / 50

Contract size for USDINR futures is:

7 / 50

What is the expiry date for a currency futures contract?

8 / 50

The Daily Settlement Price (DSP) is based on:

9 / 50

Final settlement for currency futures is in:

10 / 50

A long position in USDINR futures benefits when:

11 / 50

Tick size for USDINR futures is typically:

12 / 50

The theoretical pricing of currency futures follows:

13 / 50

In India, currency futures are regulated by:

14 / 50

Currency options in India follow which style?

15 / 50

An option is said to be ‘at-the-money’ when:

16 / 50

Which factor increases an option’s time value?

17 / 50

Who is obligated in an option contract?

18 / 50

Which of the following measures volatility sensitivity of options?

19 / 50

Intrinsic value of a call option is:

20 / 50

Currency options were introduced in India in:

21 / 50

Which of the following has a non-linear payoff?

22 / 50

A trading member, Mr. Gupta buys 100 lots of USDINR one months futures on day 1 at 66.50 and also sells 60 lots of the same contract on the same day at 66.20 in his proprietary book. The settlement price for day 1 was 66.30 and he paid the MTM margin accordingly at the end of day 1. The settlement price for day 2 is 66.80. Calculate his mark to market margin on is position on day 2.

23 / 50

Which Greek indicates the impact of time decay on an option?

24 / 50

Interest Rate Futures in India are traded on:

25 / 50

A rise in interest rates leads to:

26 / 50

Interest Rate Futures are based on:

27 / 50

Who uses interest rate derivatives for hedging?

28 / 50

Contract value in IRD is derived from:

29 / 50

The purpose of interest rate swaps is to:

30 / 50

Which of the following is NOT a benefit of IRDs?

31 / 50

Which committee laid down the framework for IRD in India?

32 / 50

Which Act brought derivatives under the definition of securities in India?

33 / 50

SEBI was established under which year’s Act?

34 / 50

Who recommends policies for the securities market in India?

35 / 50

The minimum net worth required for a Clearing Member is:

36 / 50

Who developed the VaR-based margin methodology in India?

37 / 50

Mandatory investor certification for dealers is valid for:

38 / 50

For ________, the duration will be exactly the same as bond's maturity.

39 / 50

Exchanges must have an Investor Grievance Cell in at least:

40 / 50

In case of Clearing Member default, which funds are used first?

41 / 50

All brokers in the derivative segment must obtain:

42 / 50

Derivative transactions before FY 2005–06 were considered:

43 / 50

Post Finance Act 2005, derivative gains/losses are considered:

44 / 50

What is the tax treatment for STT paid on option premium (sale)?

45 / 50

If an option is exercised, the STT is applicable on:

46 / 50

For delivery-settled derivatives, STT is charged like:

47 / 50

Accounting for MTM margin is done under:

48 / 50

Initial margin in accounting is shown as:

49 / 50

Which standard governs accounting for forward contracts?

50 / 50

Under Section 44AD, presumptive income for F&O traders can be assumed at:

Your score is

The average score is 73%

0%

NISM Series XIII Mock Test 6

NISM Series XIII (Common Derivative) Exam | Mock Test 6

1 / 50

An index option is a __________________.

2 / 50

The purchase of a share in one market and the simultaneous sale in a different market to benefit from price differentials is known as ____________.

3 / 50

Financial derivatives provide the facility for __________.

4 / 50

Operational risks include losses due to ____________.

5 / 50

State whether TRUE or FALSE: Impact cost is low when the liquidity in the system is poor.

6 / 50

Which of the following costs is not actually paid by the market participants but arises due to a lack of liquidity?

7 / 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?

8 / 50

You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs. 3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.)

9 / 50

A calendar spread contract in index futures attracts ___________.

10 / 50

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

11 / 50

When the near leg of the calendar spread transaction on index futures expires, the farther leg becomes a regular open position.

Explanation:
When you sell a put option, your maximum loss = Strike Price – Premium = 250 – 50 = Rs 200

12 / 50

You sold a put option on a share. The strike price of the put was Rs 250 & you received a premium of Rs 50. Theoretically, what can be your maximum loss in this position?

13 / 50

Current price of XYZ stock is Rs 286. Rs 260 strike call is quoted at Rs 45. What is the Intrinsic Value?

14 / 50

Who purchases an asset at a low price in one market & sells it at higher price in another?

15 / 50

What is the primary purpose of requiring margins in futures contracts?

16 / 50

In a futures market, the ___ decides all the terms of the contract other than price

17 / 50

Open interest represents the total number of ____ for an underlying asset

18 / 50

What is the agreement called where two parties agree to exchange cash flows in the future based on a pre-determined formula?

19 / 50

When did SEBI permit BSE & NSE to introduce the equity derivatives segment?

20 / 50

You expect GBP/USD to rise from 1.63 to 1.68. How should you trade GBP/INR & USD/INR futures?

21 / 50

What risk do you face if the prices of cash T-bill & T-bill futures are not the same?

22 / 50

Given in-the-money situation, with an increase in Strike Price, the premium for Call Option ______ & for Put Option ______

Explanation:

  • Sell USD at OTC @ 84.00
  • Buy back USD via Futures at 84.50 (i.e., locking future purchase lower than current sale)
  • Arbitrage profit: 84.75 (OTC bid) – 84.00 (Futures ask) = ₹0.75

23 / 50

In OTC, USD/INR is 83.75/84.00. Futures quote at 84.50/84.60. What is the best arbitrage trade & profit per USD?

24 / 50

If an Option has a high Gamma, what can be said about Option’s Delta?

25 / 50

Yield-to-maturity (YTM) assumes which of the following?

26 / 50

A person wants to buy GBP/INR one-month future at 80.50 when the current price is 80.80 & enters a limit order for 80.50. Assume the market moves in the range of 80.40–80.91 after he entered a limit order. At what price is his order likely to get executed?

27 / 50

What is the underlying asset for an interest rate future?

28 / 50

A calendar spread consists of buying & selling futures on ______

29 / 50

If 1-year interest rate is 2% in the US & 10% in India, and USD/INR is 44, what is the expected 6-month future rate?

30 / 50

The notional value in a derivatives contract refers to:

31 / 50

Which of these is a valid hedging strategy?

32 / 50

Which order is most likely to execute at current market price?

33 / 50

If implied volatility increases, which of the following increases in value?

34 / 50

Which position benefits most from falling markets?

35 / 50

What is the role of margin maintenance in derivatives?

36 / 50

 What best describes a derivative?

37 / 50

In an interest rate swap, the floating leg is typically tied to:

38 / 50

 Which of the following is a non-deliverable forward (NDF)?

39 / 50

A call option on ABC Ltd. has a strike of Rs 1,000, stock price = Rs 1,100, and premium =
Rs 150. What is the breakeven price?

40 / 50

The market value of one contract is 2,000 times the quoted price and the market price is 106.10, the face value of 200,000. Compute the market value.

41 / 50

Which term best describes EUR currency?

42 / 50

Which of the following is true?

43 / 50

Assume you are an exporter, and you want to sell USD that you have received as
export remittance. The bank quotes a price of 75.10 / 75.12 for USDINR. At what price
can you sell one unit of USD?

44 / 50

Which of the following is the role of derivatives?

45 / 50

Participant who take position in Currency Derivatives to reduce currency risk

46 / 50

Which of the following is derivatives?

47 / 50

Following derivatives contracts are traded only on Exchanges?

48 / 50

What is the settlement method for USDINR futures?

49 / 50

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

50 / 50

Which of the following is the last trading day for EURINR monthly futures contract?

Your score is

The average score is 72%

0%

NISM Series XIII Mock Test 7

NISM Series XIII Exam | Mock Test 7

1 / 50

1. A person has invested USD 100,000 in US equities with a view of appreciation of US
stock market. In next one year, his investments in US equities appreciated in value to
USD 120,000. The investor decided to sell off his portfolio and repatriate the capital
and profits to India. At the time of investing abroad the exchange rate was 74.5 and
at the time of converting USD back into INR, he received an exchange rate of 76.00.
How much is the return on investment in USD and in INR respectively?

2 / 50

2. Total number of derivatives contracts outstanding is called __________

3 / 50

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

4 / 50

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

5 / 50

5. If participant buy 10 lot of single bond futures at Rs. 99, then contract value _________.

6 / 50

6. Investors can have grievances against _______________.

7 / 50

7. Position limit for EURUSD at trading member level is?

8 / 50

8. Which of the following derivatives have the largest market size globally?

9 / 50

9. Which of the following has higher credit risk?

10 / 50

10. A client buys a USD call option at strike of 75.5 and pays a premium of INR 0.3. What
would be the breakeven point for the transaction?

11 / 50

11. Client can place order through following options ________?

12 / 50

12. The difference between option premium and intrinsic value is __________.

13 / 50

13. A person has invested INR 100,000 in an Indian corporate bond for a year giving a
return of 16% in one year. The person plans to use the proceeds from the maturity of
corporate bond to fund his son's education on US. At the time of investing in the
corporate bond, USDINR spot rate was 70 and one year premium was 4%. The person
decides to hedge currency risk using USDINR one year futures. At the end of one year,
how many USD can this person remit to his son.

14 / 50

14. As a Risk Reduction Measure, all unexecuted orders shall be cancelled once stock
broker breaches ____ collateral utilization level.

15 / 50

15. _______ are derivatives with underlying as theoretical bond and not a physical bond.

16 / 50

16. Credit spread is the price of ___________.

17 / 50

17. Due to denial of matched orders by client/s, which type of risk arises?

18 / 50

18.  Daily Mark to market settlement of Exchange traded currency future contract is
…..........

19 / 50

19. In the clearing corporation, clearing is carried out by a process called __________
netting?

20 / 50

20. The price which option buyer pays to option seller to acquire the right is called as ________.

21 / 50

21. Person goes short in a futures contract at Rs.100 and on expiry underlying price is Rs.101, he will ________.

22 / 50

22. Which of the following is the last trading day for cash settled 10-year bond futures?

23 / 50

23. Guidance Notes on Accounting for Derivatives Contract recognize following type of
hedging for hedge accounting.

24 / 50

24. An option is _________, if on exercising it, the option buyer gets positive cash flow.

25 / 50

25. Interoperability of clearing corporation framework is allowed all the products
available in the Indian securities markets, EXCEPT:

26 / 50

26. A ________ order is classified as price related condition.

27 / 50

27. Fund created to take care of legitimate investment claims

28 / 50

28. If the base rate of GBPINR one month future is Rs. 100 then its operating range will be
_______.

29 / 50

29. Usually, income from Exchange traded derivatives is treated as _________.

30 / 50

30. What is the Base Minimum Capital requirement specified by the SEBI for only
Proprietary trading without Algorithmic trading (Algo)?

31 / 50

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

32 / 50

32. If you expect the USD will appreciate against INR in future, today you should_________.

33 / 50

33. In Bullish vertical spread using put strategy, trader _________?

34 / 50

34. The concept of “accrued interest” applies to which of the following?

35 / 50

35. A Buy or a Sell order(s) which is/ are lying unmatched in the order book are known as
________________.

36 / 50

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

37 / 50

37. If the long-term rate is 10% and short-term rate is 8%, the shape of term structure of rates is ___________.

38 / 50

38. Loss on derivative transactions which are carried out in a “recognized stock exchange”
can be set off against any other income during the year except _________.

39 / 50

39. If the coupon of the bond increases, its Modified Duration will __________. (Other things remaining constant).

40 / 50

40. In OTC market, one month USDINR is quoting at 74.75/75.00 and futures for same
maturity is quoting at 75.50/75.60. Which of the following describes possible
arbitrage trade and possible arbitrage profit per USD if the arbitrage trade is carried
until maturity?

41 / 50

41. Loss on derivative transactions which are carried out in a “recognized stock exchange”
can be carried forward for period ________ assessment years

42 / 50

42. The loan rate is typically linked to the lending bank's _______.

43 / 50

43. Arbitration is a ________ judicial process.

44 / 50

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

45 / 50

45. Which of the following is interest rate derivative?

46 / 50

46. The price which option buyer pays to option seller to acquire the right is called as
________.

47 / 50

47. Execution of Power of attorney by the client in favour of stock broker is _________.

48 / 50

48. Which of the following is the role of derivatives?

49 / 50

49. __________ take position in Interest Rate Derivatives to reduce interest rate risk.

50 / 50

50. Which of the following segments of market participants are allowed to become
member of Currency Derivatives of Exchange?

Your score is

The average score is 74%

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NISM Series XIII Mock Test 8

NISM Series XIII Exam | Mock Test 8

1 / 50

1. A stock is currently selling at Rs. 165. The put option at Rs. 163 strike price costs Rs.3. What is the time value of the option?

2 / 50

2. In Bullish vertical spread using put strategy, trader _________.

3 / 50

3. Limitation of Interest Rate Derivatives for Hedgers is mainly due to __________.

4 / 50

4. A Buy or a Sell order(s) which is/are lying unmatched in the order book are known as ________________.

5 / 50

5. The ratio of change in delta for a unit change in the price of underlying is called ________.

6 / 50

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

7 / 50

7. The yield to maturity assumes that the term structure of zero rates is ______ by using the same rate for all cash flows.

8 / 50

8. Arbitration is a ________ judicial process.

9 / 50

9. Investors can have grievances against _______________.

10 / 50

10.

Daily Mark to market settlement of Exchange traded interest rate future contract is __________.

11 / 50

11. 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.

12 / 50

12. When the forex strike rate increases, the put option premium _______.

13 / 50

13. RBI guideline on Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019 permit _______________ to participate in interest rate derivatives contract.

14 / 50

14. In terms of jurisdiction of regulator, the regulation of interest rate derivatives is similar to that of ___________.

15 / 50

15. Subsequent to KYC, broker has to upload the KYC information in _______ system.

16 / 50

16. If the base rate of Overnight MIBOR futures is 5, then its operating range will be _______.

17 / 50

17. Forex rates can be quoted as spot or, _______ contracts.

18 / 50

18. A ________ order is classified as price related condition.

19 / 50

19. ____________ are the maximum exposure levels which the entire market can go up to and each trading member or investor can go up to.

20 / 50

20. Hedging for multiple bonds in portfolio can be done by using _________.

21 / 50

21. The difference between option premium and intrinsic value is __________.

22 / 50

22. The difference between the interest rate applicable to a non-sovereign borrowers and corresponding rate for sovereign borrower is called _______.

23 / 50

23. Participants buy a put option with strike price of 98.50 at a premium of Rs. 0.20. On Expiry the bond price is Rs. 98.50. What is his net pay-off?

24 / 50

24.

Position limits guideline for Exchange traded interest rate derivatives is provided by __________.

25 / 50

25. Exchanges provide __________ separately for taking calendar spread combination.

26 / 50

26. Usually, income from Exchange traded derivatives is treated as _________.

27 / 50

27. An option is _________, if on exercising it, the option buyer gets negative cash flow.

28 / 50

28.

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

29 / 50

29.

__________ is the fund created to take care of legitimate investment claims, which are not of speculative nature of the clients of defaulting member.

30 / 50

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

31 / 50

31.

Loss on derivative transactions which are carried out in a “recognized stock exchange” can be carried forward for a period of ________ assessment years.

32 / 50

32. A client can place order in exchange traded interest rate derivatives through _______.

33 / 50

33. Interoperability of clearing corporation framework is allowed for all the products available in the Indian securities markets, EXCEPT: __________.

34 / 50

34.

What is the Base Minimum Capital requirement specified by the SEBI for only Proprietary trading without Algorithmic trading (Algo)?

35 / 50

35. If you expect the interest rate will go up in future, today you should _________.

36 / 50

36. Due to denial of matched orders by client/s, which type of risk arises?

37 / 50

37. The position limit is the limit on an investor's share in the total open interest.

38 / 50

38. _______ is the price that is used to compute the price range for the opening trade on any trading day.

39 / 50

39. Execution of Power of attorney by the client in favour of stock broker is _________.

40 / 50

40. Horizontal spread is also known as Calendar spread!

41 / 50

41. Loss on derivative transactions which are carried out in a “recognized stock exchange” can be set off against any other income during the year, except _________.

42 / 50

42. The underlying super asset class consists of _______.

43 / 50

43.

Assume that on 1st December 2020, USD-INR spot was at 45, premium for January 2021 maturity put option at strike of 45.5 is INR 0.54/0.55 and premium for January 2021 maturity call option at strike of 45 is INR 0.71/0.72. A client executes a trade wherein he buys put at a strike of 45.5 and sells a call at a strike of 45. On expiry the RBI reference rate is 44.75. How much net profit/loss did the client make per USD?

44 / 50

44. Corporate actions are broadly classified under _____________ and _____________.

45 / 50

45. What is the client level position limit in derivative trading?

46 / 50

46. The initial margin amount is large enough to cover a one day loss that can be encountered on ________ of the days.

47 / 50

47. Time value of an option is _____________.

48 / 50

48.

Guidance Notes on Accounting for Derivatives Contract recognise following type of hedging for hedge accounting: ____________.

49 / 50

49. In the clearing corporation, clearing is carried out by a process called _______ netting.

50 / 50

50. As a Risk Reduction Measure, all unexecuted orders shall be cancelled once stock broker breaches ________ collateral utilization level.

Your score is

The average score is 73%

0%

NISM Series XIII Mock Test 9

NISM Series XIII Exam | Mock Test 9

1 / 50

1. A ________ is allowed to execute trades on his own account as well as on account of his clients.

2 / 50

2.

If 1 year interest rate is 2% in USA and 10% in India, and USDINR is at 44, what is the expected 6 month future rate?

3 / 50

3. The Member shall maintain a _______ record of having made such margin calls and that the clients have not complied with the same.

4 / 50

4.

How can a person, who is holding a fixed income security, hedge his position?

5 / 50

5. Fair value in the context of derivative contracts represents the ___________.

6 / 50

6. The price operating range for 6 year bond futures is plus or minus _______ of the base rate.

7 / 50

7. Position Limit for a Bank TM on JPYINR is ____________.

8 / 50

8. The _______ must ensure that the clients fill-up the KYC form and submit it to them.

9 / 50

9. In case of commercial paper, the minimum and multiple of issue is ______.

10 / 50

10. If the underlying hedged item is a highly forecast transaction the profit or loss on the hedging derivative is stored in _______ until the forecast transaction materializes.

11 / 50

11. _______ will depend on the timing of expected receipt or payment of foreign currency.

12 / 50

12. The cost of equity can be estimated or derived from capital asset pricing model.

13 / 50

13. Securities Transaction Tax (STT) in case of Sale of an option in securities is payable by_______.

14 / 50

14.

A trading cum clearing member has a client X who has purchased and sold 1000 and 2000 contracts respectively in the June series of ABC futures ( contract multiplier 50 ). The trading cum clearing member has purchased and sold 2200 and 1500 contracts respectively on his own account in the same June series of ABC futures ( contract multiplier 50 ). What is the outstanding liability ( open position ) of the member towards clearing corporation in the number of contracts?

15 / 50

15.

A company expects to receive USD 100,000 in 2 months. Current USDINR is 83.40. To hedge, it sells USD futures at 83.60. If INR appreciates to 83.00 at expiry, what is the profit?

16 / 50

16. The purchase of a share in one market and the simultaneous sale in a different market to benefit from price differentials is known as ____________.

17 / 50

17. A ___________ is a contract where a trader buys/sells a particular month contract and sells/buys of the same contract of a different month.

18 / 50

18. __________ net worth shall be computed as liquid assets less initial margin and extreme loss margin payable at any point in time.

19 / 50

19.

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

20 / 50

20.

Assume the price of government bond futures is 115, find market value of 1 contract?

21 / 50

21. The current yield cannot be considered as true return because it does not consider the ________.

22 / 50

22. ___________ are derivative contracts which derive their value from an underlying index.

23 / 50

23. Permission from Exchange is not required for a sub broker to advertise his business.

24 / 50

24. The price which option buyer pays to option seller to acquire the right is called as ___________.

25 / 50

25. __________ products are nothing but a combination of different derivative products.

26 / 50

26. Proprietary position : Buy 20*1000*40.0000 indicates :

27 / 50

27. The OTC market offers both standardized vanilla products and customized called exotic products.

28 / 50

28. Currently, American options are allowed in currencies in India.

29 / 50

29.

If the annual interest rate is 5% and the dividend yield on a stock is 2%, what is the six-month futures price of a stock currently trading at Rs 500 in the spot market?

30 / 50

30. Short Hedge is a transaction when the hedge is accomplished by going short in futures market.

31 / 50

31.

Rohan buys GBPINR futures at various price points over two days. He buys 20 lots at 80.00 at 11.30 am and 15 lots at 80.25 at 1.30 pm on Day 1. On Day 2 he buys 25 lots at 80.50 at 11 am and 10 lots at 80.40 at 2 pm. On Day 3 he sells 10 lots at 79.90. Calculate his profit/loss on the squared off position using FIFO method

32 / 50

32.

For every 100 ticks the price of a government bond futures contract moves, the contract value changes by Rs ___

33 / 50

33. A calendar spread contract in index futures attracts ___________.

34 / 50

34. Long Straddle is a strategy with __________.

35 / 50

35. An investor buys a 4 lots of Nifty at Rs. 10,500 each. He sells 2 lots at Rs. 10,550 and carries 2 lots for next day. On that day, Nifty futures closes at Rs. 10,600. What is his total profit/Loss including mark to market profit/Loss? Nifty lot size is 75 .

36 / 50

36. If a member has payable obligation towards pay-in as well as margins, then ________.

37 / 50

37.

A trading member buys 70 lots of GBPINR one month future on day 1 at 91.50 and sells 80 lots of the same contract on the same day at 91.60 in his proprietary book. The settlement for the day was at 91.20. What would be the mark to market margin on the open position in INR?

38 / 50

38.

A trading member has two clients in currency futures segment and one client in currency option segment. At the end of a trading day, one of the clients in currency futures segment has 5000 USD short position and the other client has 4000 USD long position. Additionally, the currency option client has 2000 USD long position. What is the gross open position for the trading member for the purpose of monitoring open position?

39 / 50

39. For equity derivatives, carrying cost is the interest paid to finance the purchase less (minus) dividend earned.

40 / 50

40. all contracts involvi_______ shall ensure that their short positions at all stock Exchanges across ng Indian Rupee do not exceed USD 100 million.

41 / 50

41. As a trader you believe EURUSD will move from 1.38 to 1.44 in next 2 months. Which of the following would you do to execute this view using currency futures contract of EURINR and USDINR?

42 / 50

42. SEBI-registered brokers can introduce DMA facility to their clients after obtaining permission from respective ____________.

43 / 50

43. On the derivative exchanges, all the orders entered on the Trading System are at prices exclusive of brokerage.

44 / 50

44.

If futures price is higher than spot price of an underlying asset, this is known as

45 / 50

45. _________ is the rate of change of the value of the portfolio with respect to the passage of time with all else remaining the same.

46 / 50

46. When the trading member does Trade in his client A/c it is entered as _________.

47 / 50

47.

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

48 / 50

48.

Yield curve spread risk arises when the term structure shift is

49 / 50

49. The initial margin for calendar spread on MIBOR futures beyond 3 years shall be _______.

50 / 50

50.

In a payoff graph, on which axis is the price of underlying asset plotted?

Your score is

The average score is 65%

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NISM Series XIII Mock Test 10

NISM Series XIII Exam | Mock Test 10

1 / 50

1.

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

2 / 50

2.

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

3 / 50

3.

A ________ order is classified as price related condition.

4 / 50

4.

The lot size for EURINR futures contract is

5 / 50

5.

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

6 / 50

6.

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

7 / 50

7.

Value-at-risk measures ___________.

8 / 50

8.

An in-the-money option is _____________.

9 / 50

9.

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?

10 / 50

10.

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

11 / 50

11.

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

12 / 50

12.

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

13 / 50

13.

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?

14 / 50

14.

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

15 / 50

15.

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

16 / 50

16.

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

17 / 50

17.

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?

18 / 50

18.

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?

19 / 50

19.

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

20 / 50

20.

Guidelines for accounting of currency futures contracts are issued by ____

21 / 50

21.

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?

22 / 50

22.

In options trading, Gamma is best described as:

23 / 50

23.

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

24 / 50

24.

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

25 / 50

25.

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

26 / 50

26.

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

27 / 50

27.

______ is true for exchange traded derivatives

28 / 50

28.

In Bullish vertical spread using put strategy, trader _________?

29 / 50

29.

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.

30 / 50

30.

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

31 / 50

31.

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

32 / 50

32.

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

33 / 50

33.

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

34 / 50

34.

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?

35 / 50

35.

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?

36 / 50

36.

How are proprietary positions calculated for a Trading Member?

37 / 50

37.

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.

38 / 50

38.

Cash-and-carry arbitrage involves ____

39 / 50

39.

The default mode of settlement in OTC spot market is ____

40 / 50

40.

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

41 / 50

41.

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

42 / 50

42.

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.

43 / 50

43.

Investors can have grievances against _______________.

44 / 50

44.

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

45 / 50

45.

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?

46 / 50

46.

Which of the following example is of Market Making?

47 / 50

47.

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

48 / 50

48.

What is algorithmic trading?

49 / 50

49.

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

50 / 50

50.

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

Your score is

The average score is 73%

0%

NISM Series XIII Mock Test 11

NISM Series XIII Exam | Mock Test 11

1 / 50

1.

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

2 / 50

2.

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

3 / 50

3.

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

4 / 50

4.

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

5 / 50

5.

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

6 / 50

6.

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?

7 / 50

7.

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.

8 / 50

8.

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

9 / 50

9.

______ is true for exchange traded derivatives

10 / 50

10.

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

11 / 50

11.

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

12 / 50

12.

A Derivative market helps in transferring the risk from

13 / 50

13.

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

14 / 50

14.

The effect of reinvestment risk on bond returns is _____

15 / 50

15.

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

16 / 50

16.

Identify the contract which is cleared and settled bilaterally

17 / 50

17.

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

18 / 50

18.

Which of the following example is of Market Making?

19 / 50

19.

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

20 / 50

20.

Delta for a put option buyer is positive

21 / 50

21.

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

22 / 50

22.

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

23 / 50

23.

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

24 / 50

24.

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

25 / 50

25.

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?

26 / 50

26.

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

27 / 50

27.

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.

28 / 50

28.

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

29 / 50

29.

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

30 / 50

30.

Repo transaction means ____

31 / 50

31.

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

32 / 50

32.

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

33 / 50

33.

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

34 / 50

34.

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

35 / 50

35.

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

36 / 50

36.

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

37 / 50

37.

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

38 / 50

38.

Cash-and-carry arbitrage involves ____

39 / 50

39.

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

40 / 50

40.

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?

41 / 50

41.

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?

42 / 50

42.

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)?

43 / 50

43.

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

44 / 50

44.

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?

45 / 50

45.

What is an open position in a derivatives market?

46 / 50

46.

A Professional Clearing Member of derivatives segment _______

47 / 50

47.

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

48 / 50

48.

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

49 / 50

49.

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

50 / 50

50.

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

Your score is

The average score is 74%

0%

NISM Series XIII Mock Test 12

NISM Series XIII Exam | Mock Test 12

1 / 50

1.

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

2 / 50

2.

The margining system for index futures is based on

3 / 50

3.

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

4 / 50

4.

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?

5 / 50

5.

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

6 / 50

6.

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

7 / 50

7.

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?

8 / 50

8.

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

9 / 50

9.

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

10 / 50

10.

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

11 / 50

11.

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

12 / 50

12.

Repo transaction means ____

13 / 50

13.

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

14 / 50

14.

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

15 / 50

15.

A Derivative market helps in transferring the risk from

16 / 50

16.

Identify the contract which is cleared and settled bilaterally

17 / 50

17.

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

18 / 50

18.

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

19 / 50

19.

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

20 / 50

20.

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

21 / 50

21.

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

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)?

23 / 50

23.

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

24 / 50

24.

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.

25 / 50

25.

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

26 / 50

26.

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

27 / 50

27.

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

28 / 50

28.

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

29 / 50

29.

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

30 / 50

30.

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

31 / 50

31.

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

32 / 50

32.

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

33 / 50

33.

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

34 / 50

34.

Delta for a put option buyer is positive

35 / 50

35.

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

36 / 50

36.

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

37 / 50

37.

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

38 / 50

38.

The effect of reinvestment risk on bond returns is _____

39 / 50

39.

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?

40 / 50

40.

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?

41 / 50

41.

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

42 / 50

42.

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?

43 / 50

43.

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

44 / 50

44.

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

45 / 50

45.

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

46 / 50

46.

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

47 / 50

47.

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

48 / 50

48.

A Professional Clearing Member of derivatives segment _______

49 / 50

49.

What is an open position in a derivatives market?

50 / 50

50.

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

Your score is

The average score is 78%

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NISM Series XIII Mock Test 13

NISM Series XIII Exam | Mock Test 13

1 / 50

1.

Assume that price of a USDINR call option is quoted as INR 0.45/0.47 ( bid price/as price ). Given this quote, at what price could a company buy the call option?

2 / 50

2.

The strategy of ____ involves options with different strike prices but same expiry dates

3 / 50

3.

A member has two clients C1 and C2. C1 has purchased 800 contracts and C2 has sold 900 contracts in August XYZ futures series. What is the outstanding liability (open position) of the member towards Clearing Corporation in number of contracts?

4 / 50

4.

A speculator in currency market buys a long position in USDINR futures contract at a price of 52 and he buys 25 lots of the same. On expiry the settlement price is announced at 52.35. What will be his profit or loss?

5 / 50

5.

When the spot forex rate increases, the call option premium

6 / 50

6.

Mr. John sells one ABC stock futures contract at Rs 745. What is his profit or loss if he purchases the contract back at Rs 754, lot size is 1500

7 / 50

7.

Theta is the rate of change in option premium for a unit change in ____

8 / 50

8.

The time value of an option is the portion of option premium that is linked to the amount of time left till expiry of the option contract and also due to the fact that the underlying components that determine the value of option may change during that time

9 / 50

9.

Shyam is a chartered accountant and Ram is a commerce graduate. Both are clearing members of a recognized exchange. Based on this information, identify the true statement

10 / 50

10.

____ can write an option in Indian stock market

11 / 50

11.

Put-call parity refers to the relationship between: ________.

12 / 50

12.

Delta refers to rate of change in the ____

13 / 50

13.

Excess of premium in an option over the intrinsic value is known as the time value

14 / 50

14.

If you expect the USDINR to breakout of a trading range, then which strategy you can adopt?

15 / 50

15.

A trader feels that INR should depreciate against USD in next few months. What currency futures trade will be profitable to him if his views comes correct?

16 / 50

16.

If the trading member is long in 200 contracts and is short in 120 contracts, the net proprietary open position is ____

17 / 50

17.

What is the order called which if not executed during the day, the system cancels the order automatically at the end of the day?

18 / 50

18.

When there is a ‘Closing Buy Transaction’ this will have the effect of partly or fully offsetting __

19 / 50

19.

A trading member buys 70 lots of GBPINR one month futures on day 1 at 91.50 7 also sells 80 lots of the same contract on the same day at 91.60 in his proprietary book. The settlement price for the day was Rs 91.20. What would be MTM margin on the open position ( in rupees )?

20 / 50

20.

Hedgers and Speculators are two important participants of a securities market and they strike a balance due to their needs as ___

21 / 50

21.

What is the risk of bad delivery in an index futures contract?

22 / 50

22.

If an investor buys a call option with lower strike price and sells another call option with higher strike price, both on the same underlying share and same expiration date, the strategy is called ___________.

23 / 50

23.

When SEBI has approved the approves bye-laws of a derivative exchange, the exchange is free to introduce futures contracts on any number of stocks and it does not require to go to SEBI every time.

24 / 50

24.

Is it true that at expiration, the value of an option is its intrinsic value

25 / 50

25.

The Beta of a portfolio is the ____

26 / 50

26.

When does the monthly series mature for Nifty index futures?

27 / 50

27.

What happens to the intrinsic value of a put option if the strike price is taken down?

28 / 50

28.

Margins across the various clients of a member are collected on a gross basis

29 / 50

29.

How should a seller of an option treat the premium received in his books of accounts?

30 / 50

30.

Identify the true formula for Cost of Carry Model

31 / 50

31.

‘Rho’ is connected to the ____

32 / 50

32.

Vega for long call or long put is always

33 / 50

33.

Identify the FALSE statement

34 / 50

34.

When a client defaults in making payments in respect of a daily settlement, the contract is closed out. The amount not paid by the client is adjusted against the ___

35 / 50

35.

Which of the following is interest rate derivative?

36 / 50

36.

In a system of 100 currencies with no vehicle currencies, potentially there would be ____ currency pairs

37 / 50

37.

A calendar spread contract in index futures attracts ___________.

38 / 50

38.

When the interest rate differential between a base and quoting currency increases, the call option premium

39 / 50

39.

Which member of a stock exchange is not a Trading Member itself but clears and settles the trades of Trading members and institutional clients?

40 / 50

40.

In currency future contract, daily mark to market will be on a ____

41 / 50

41.

You sold a Put option on a share. The strike price of the put was Rs. 245 and you received a premium of Rs 49 from the option buyer. Theoretically, what can be the maximum loss on this position?

42 / 50

42.

___ is the process of computing open positions and determining mark to market margins

43 / 50

43.

If a speculator purchases a naked call option, this means he/she has ____

44 / 50

44.

The risk connected with trading in derivatives have to be laid down in which document?

45 / 50

45.

A trader in currency markets believes that USDJPY will move from 105 to 108 in next 1 month. Which of the following would you do to execute this view using currency futures contract of JPYINR and USDINR?

46 / 50

46.

Specify the lot size of EURINR futures contract

47 / 50

47.

Who acts as a central counter party to JPYINR futures trade in India?

48 / 50

48.

A client sells a USD call option at a strike price of 53.80 and receives premium of INR 0.30. What would be the breakeven point for the transaction?

49 / 50

49.

What does ‘ Near Month ‘ futures contract mean?

50 / 50

50.

An importer takes a long position in USDINR futures contract at a price of 53 by buying 20 lots. At the  expiry, the settlement price is 54.3. how much profit or loss did the importer make?

Your score is

The average score is 73%

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NISM Series XIII Mock Test 14

NISM Series XIII Exam | Mock Test 14

1 / 50

1.

The economic role of derivatives is

2 / 50

2.

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

3 / 50

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

4 / 50

4.

3-month calendar spread for GBPINR is

5 / 50

5.

The accrued interest is paid by

6 / 50

6.

Contract size for currency future contract is ____

7 / 50

7.

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

8 / 50

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

9 / 50

9.

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

10 / 50

10.

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

11 / 50

11.

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?

12 / 50

12.

What does a seller of a Put option expect?

13 / 50

13.

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

14 / 50

14.

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

15 / 50

15.

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

16 / 50

16.

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

17 / 50

17.

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

18 / 50

18.

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

19 / 50

19.

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

20 / 50

20.

True return can be calculated in advance for

21 / 50

21. 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 ________.

22 / 50

22.

_____ has the highest notional amount outstanding in world derivative market

23 / 50

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

24 / 50

24.

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

25 / 50

25.

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

26 / 50

26.

When a seller Short Sells a stock, it means ___

27 / 50

27.

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

28 / 50

28.

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

29 / 50

29.

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

30 / 50

30.

Arbitragers take advantage of ______ in the markets

31 / 50

31.

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?

32 / 50

32.

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

33 / 50

33.

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

34 / 50

34.

Forward on interest rate is called

35 / 50

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

36 / 50

36.

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

37 / 50

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

38 / 50

38.

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

39 / 50

39.

A Professional Clearing Member can execute trades for

40 / 50

40.

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?

41 / 50

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

42 / 50

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

43 / 50

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

44 / 50

44.

The initial margin is always equal to mark to market margin

45 / 50

45.

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

46 / 50

46.

The Public Debt Office is the depository for

47 / 50

47.

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

48 / 50

48.

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

49 / 50

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

50 / 50

50.

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

Your score is

The average score is 67%

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NISM Series XIII Mock Test 15

NISM Series XIII Exam | Mock Test 15

1 / 50

1. Secured premium notes are an example of __________.

2 / 50

2. Scrips or portfolios having beta greater than 1 are called aggressive scrips or portfolios respectively.

3 / 50

3. Rohit sells USD-INR 6 contracts (1 lot= USD 1000) at Rs. 46.2550 per unit. If tick size is Re.0025 how much he will gain or lose if there is upward movement of 6 ticks?

4 / 50

4. For zero-coupon bond, yield to maturity is the true measure of return because there is _______.

5 / 50

5. The Exchange imposes stringent penalty on members who do not collect margins from their clients.

6 / 50

6. If the market rate rises, the bond price falls but reinvestment income rises.

7 / 50

7. On 15th December Mr. Arnab bought a April USDINR futures contract which cost him Rs.44000. Each USDINR futures contract is for delivery of USD1000. The RBI reference rate for final settlement was fixed as 44.10. How much profit/loss did he make?

8 / 50

8. _______ have the right to impose additional risk containment measures over and above the risk containment system mandated by SEBI.

9 / 50

9. ________ is a dynamic figure that changes based on activity in the options market place.

10 / 50

10. On the last day of trading, settlement for futures contracts takes place at ___________.

11 / 50

11. The scrip will be banned in derivatives segment if the open interest __________.

12 / 50

12. The minimum trading increment or price differential at which traders are able to enter bids and offers is called as ____________.

13 / 50

13. The modified duration is affected by changes in _______.

14 / 50

14. The Exchange/CC specifies the _________ margin requirements for each futures contract on a daily basis.

15 / 50

15. The gains or losses arising from trading in Exchange traded derivatives are taxable under the head _______.

16 / 50

16. Which of the following cannot be an underlying asset for a FINANCIAL derivative contract?

17 / 50

17. Daily settlement price of futures contracts on any trading day is ________________.

18 / 50

18. __________ is an inter-bank market that took shape in 1971 when global trade shifted from fixed exchange rates to floating rate regimes.

19 / 50

19. _______ are allowed to provide trade annulment request on trading system.

20 / 50

20. Impact cost is low when the liquidity in the system is poor.

21 / 50

21. In a system of 10 currencies, if one currency is selected as the vehicle currency and used for all transactions, there would be a total of ______ currency pairs or exchange rates to be dealt with.

22 / 50

22. The price at which settlement takes before spot date is a derived price from spot price and is not a __________ Price.

23 / 50

23. When the loss of member crosses the ______ of the total deposit limit, the member is suspended by the system.

24 / 50

24. The act of converting a floating-rate loan into a fixed-rate loan is _______.

25 / 50

25. _______ is the market between banks where dealers quote prices at the same time for both buying and selling the currency.

26 / 50

26. ___________ reduces both return and risk but in such a way that risk is reduced more than return so that risk is minimized per unit return.

27 / 50

27. The calendar spreads have lesser margin requirements.

28 / 50

28. Total price risk in investment in securities is the sum of systematic risk or market risk and unsystematic risk or specific risk.

29 / 50

29. ______ is the methodology used for pricing European options.

30 / 50

30. ______ is mitigated by delivery-versus-payment mode of settlement.

31 / 50

31. The interoperability framework is applicable to all the recognised clearing corporations excluding those operating in ___________.

32 / 50

32. ______ dimensionless number that tells us the percentage change in bond's price caused by a given change in the yield.

33 / 50

33. What is the difference between futures price and spot price known as __________.

34 / 50

34. You have 100 Reliance shares bought at 1000 in your portfolio. How do you hedge it? CMP is Rs1000.

35 / 50

35. In case of 10 year government bond, if less than five trades occur during the last two hours of trading, then _______ shall be used for final settlement.

36 / 50

36. In OTC, the market is open from 9:00 AM to 4:30 PM for ______.

37 / 50

37. Daily settlement price of futures contracts on expiry day is _______________.

38 / 50

38. If the bond is held until maturity, there will be no price risk because of _______ of bond price at maturity.

39 / 50

39. ABC is currently at 5100. An investor feels ABC company will not go beyond 5300 in next three months. He sells two lots of 5100 strike call on ABC company for Rs. 200 a lot. Because of good industrial production data, ABC company rallies to 5200 on the option's expiry day. What is the Profit/ Loss to the investor? (1 lot = 50 shares)

40 / 50

40. _________ risk is the potential risk that arises from mismatches in a hedged position.

41 / 50

41. An oil-importing firm- ABC Co. is expected to make future payments of USD 100000 after 3 months (in USD) for payment against oil imports. Suppose the current 3-month futures rate is Rs. 41. ABC Co. goes long in the futures contract to hedge itself. Its hedging strategy will protect itself against adverse exchange rate movements.

42 / 50

42. An index option is a __________________.

43 / 50

43. A protective put payoff is similar to that of ___________.

44 / 50

44. A Stock is currently selling at Rs 70. The call option to buy the stock at Rs 65 costs 9. what is the time value of the option?

45 / 50

45. If one year interest rate is 2% in US and 8% in India. If current USDINR spot rate is 54 which of the following could be closest to the six month future rate of USDINR?

46 / 50

46. The IIP numbers are reported using __________ as the base year for comparison.

47 / 50

47. The call option buyer would exercise the option only if the spot price of underlying asset is higher than the strike price and premium paid.

48 / 50

48. In case a futures contract is not traded on a day or not traded during the last half hour, ____________ is used for daily settlement.

49 / 50

49. Presume Entity A is expected to pay USD 5000 after 3 months. He Wants to lock in the foreign exchange rate today so that the value of outflow in Indian rupee terms is safeguarded. The entity can do so by ________ of USD-INR futures at NSE since one contract is for USD 1000.

50 / 50

50. _______________ has introduced STT on all derivative transactions entered into a stock exchange.

Your score is

The average score is 62%

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NISM Series XIII Mock Test 16

NISM Series XIII Exam | Mock Test 16

1 / 50

1. "Greeks" is a term used in the _________ market to describe the different dimensions of risk involved in taking an options position.

2 / 50

2. A ________ sheet specifying various charges, including brokerage, payable by the client to avoid any disputes at a later date.

3 / 50

3. What are the basic accounting heads to be maintained by any market participant for maintaining currency futures accounts?

4 / 50

4. ______ are the contracts to buy or sell a right on underlying with cash for settlement on a future date.

5 / 50

5. An investor buys 2 contracts of TCS futures for Rs. 570 each. He sells of one contract at Rs. 585. TCS futures closes the day at Rs. 550. What is the net payment the investor has to pay / receive from his broker?
(1 TCS contract = 1000 shares)

6 / 50

6. The margin requirement for spread should not double the margin for one but should be more than the margin for one of them.

7 / 50

7. _______ is the minimum trading increment or price differential at which traders are able to enter bids and offers.

8 / 50

8. An __________ order allows a trading member to buy or sell a security as soon as the order is released into the market, failing which the order will be removed from the market.

9 / 50

9. In case of the exchange traded interest rate options contracts, the base price on the first day of the contract is computed using _______.

10 / 50

10. __________ can be defined as the futures price minus the spot price.

11 / 50

11. When the interest rate differential between base and quoting currency increases, the put option premium _______.

12 / 50

12. ________ for all segments/Exchanges detailing risk associated with dealing in the securities market.

13 / 50

13. Derivatives can be classified into five asset classes, in each asset class, there are ________ generic products.

14 / 50

14. By hedging, the losses made in the underlying market is offset by the profits made in the futures market.

15 / 50

15. _______ does not pay any amount before maturity date.

16 / 50

16. Cable is the nickname for which currency?

17 / 50

17. An open interest is the total number of contracts traded in a month for an underlying asset.

18 / 50

18. The _______ determines the zero rates, which in turn determine the bond price.

19 / 50

19. ____________ is charged on the net exercise settlement value payable by a Clearing Member towards final exercise settlement.

20 / 50

20. The breakeven point in a Bull Put spread is ________.

21 / 50

21. The price of currency pair for which direct prices is not available is called as cross rate.

22 / 50

22. ______ is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers.

23 / 50

23. Cli' order stands for _______.

24 / 50

24. If a trader in the currency futures market expects INR to depreciate against USD then he will sell USD/INR.

25 / 50

25. The total initial margin required for all trades in an investor account is computed through _______ methodology.

26 / 50

26. In India, all the currency options in OTC market are of European type.

27 / 50

27. If the price is above premium, YTM will be lower than coupon.

28 / 50

28. Which of these PUT options are ITM?

29 / 50

29. The steepening term structure may occur when both rates move in opposite direction which is termed as _______.

30 / 50

30. While calculating Client Positions, positions are netted across clients.

31 / 50

31. Extreme Loss Margin for USDINR is ____________.

32 / 50

32. _______ risk that the buy or sell order placed in ETCD may not get executed at the desired price due to higher price volatility.

33 / 50

33. The initial margin for calendar spread on 91 days T-bill futures for 1 month shall be _______.

34 / 50

34. On 14th April, Future Price of XYZ Ltd is Rs 140 and Spot price of XYZ is Rs 138. Spot closed on expiry date at Rs 142. What should be the future price of XYZ on expiry date?

35 / 50

35. Spot value of nifty is 11,000. An investor bought a one month nifty 11,200 call option for a premium of Rs 100. The option is:

36 / 50

36. If USD interest rate were to go up and INR interest rate were to remain stable, then future price of USDINR would _______.

37 / 50

37. Clearing Members who do not Trade but clear and settle trades executed by Trading Members are:

38 / 50

38. A Short Hedge is a deal that produces risk free profits by exploiting a mispricing in the market.

39 / 50

39. Under hedge accounting, the hedged item can be only government security that is categorized in _______.

40 / 50

40. ____________ is charged on the net exercise settlement value payable by a Clearing Member towards final exercise settlement.

41 / 50

41. The schedule commercial banks which hold SGL a/c is the equivalent of depository participants.

42 / 50

42. If the market rate rises, the bond price falls because of _______.

43 / 50

43. _________ are derivative contracts to buy or sell returns from the underlying with returns from cash over a period through OTC market.

44 / 50

44. The __________ for cross currency derivatives shall be collected in Indian Rupees (INR).

45 / 50

45. A trader has sold a put option with strike of Rs. 1500 at a premium of Rs. 60. What is the maximum gain per share that he may have on expiry of this position ?

46 / 50

46. The maximum loss in Bull Put spread is ________.

47 / 50

47. If the rate of inflation exceeds the coupon rate of a bond, the real interest rate on the bond will be negative.

48 / 50

48. ______ is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers.

49 / 50

49. Use of a vehicle currency greatly reduces the number of exchange rates that must be dealt with in a multilateral system.

50 / 50

50. A speculator with a bullish view on USD-INR rate can _________.

Your score is

The average score is 62%

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NISM Series XIII Mock Test 18

NISM Series XIII Exam | Mock Test 18

1 / 50

1.

What is the profit or loss for a short futures position entered at Rs 180 if the market price at expiry is Rs 230?

2 / 50

2.

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

3 / 50

3.

If 1 year interest rate is 2% in USA and 10% in India, and USDINR is at 44, what is the expected 6 month future rate?

4 / 50

4.

An exporter sells 10 lots of EURINR futures at 63. The settlement price is 63.70. what is the result?

5 / 50

5.

Other things remain constant, Modified Duration will ____ if coupon payment frequency of bond increases?

6 / 50

6.

Assume the price of government bond futures is 115, find market value of 1 contract?

7 / 50

7.

Why have many stock indices globally moved to the free float basis?

8 / 50

8.

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

9 / 50

9.

_______ commenced introduction of Exchange Traded Currency Futures in India

10 / 50

10.

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

11 / 50

11.

A trader enters into a long futures contract at Rs 400. If the market price of the underlying asset at expiry is Rs 470, what is the payoff? Additionally, what would be the payoff if the market price at expiry is Rs 340?

12 / 50

12.

As per the Forex Management Act, an AD Category 1 Bank should have a minimum net worth of ____ to become a trading and clearing member of Currency Futures segment in for a recognized stock exchange.

13 / 50

13.

Which of the following is an example of inter-commodity spread?

14 / 50

14.

A market order is executed at ______

15 / 50

15.

Brokers of recognized stock exchange should promptly issue ____ to his clients as well as clients of his sub brokers

16 / 50

16.

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

17 / 50

17.

Cash-and-carry arbitrage involves ____

18 / 50

18.

Traders grievance against any trading member are settled by arbitration. The arbitrator conducts the process and passes an award normally within ____ from the date of initial hearing

19 / 50

19.

What is the maximum loss for a long call option position?

20 / 50

20.

What is the similarity between a protective put and a long call?

21 / 50

21.

Who receives end of day report from all branches and dealers under same trading member?

22 / 50

22.

Why is the percentage change of an index is more important than the actual numeric value?

23 / 50

23.

A trading member has two clients in currency futures segment and one client in currency option segment. At the end of a trading day, one of the clients in currency futures segment has 5000 USD short position and the other client has 4000 USD long position. Additionally, the currency option client has 2000 USD long position. What is the gross open position for the trading member for the purpose of monitoring open position?

24 / 50

24.

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

25 / 50

25.

What is the minimum net worth a company needs to have for it to be eligible for applying to become authorized exchange for currency futures?

26 / 50

26.

What is the first step in clearing process?

27 / 50

27.

In a payoff graph, on which axis is the price of underlying asset plotted?

28 / 50

28.

The expiry date for interest rate future is

29 / 50

29.

A trading member buys 70 lots of GBPINR one month future on day 1 at 91.50 and sells 80 lots of the same contract on the same day at 91.60 in his proprietary book. The settlement for the day was at 91.20. What would be the mark to market margin on the open position in INR?

30 / 50

30.

Which of the following organization issues guidelines for accounting of currency futures contract?

31 / 50

31.

If in case of Put buy, Spot Price < Strike Price then it means buyer is

32 / 50

32.

What is a pre-decided contractual agreement between two parties to exchange an underlying asset at a certain future date for a pre-decided price, negotiated over the counter?

33 / 50

33.

When one party in a forward contract fails to fulfill its obligation. It’s called ___

34 / 50

34.

Value at Risk (VaR) is a measure of maximum likely price change ove

35 / 50

35.

What is the maximum exposure level the entire market or a trading member can go up to?

36 / 50

36.

______ is used to describe a market where the futures price is higher than spot price

37 / 50

37.

What is the similarity between a protective put and a long call?

38 / 50

38.

Spot price of USDINR is 82.80, one month futures is 83.10. What should an arbitrageur do?

39 / 50

39.

What is the primary objective of SPAN in the context of margining?

40 / 50

40.

A company expects to receive USD 100,000 in 2 months. Current USDINR is 83.40. To hedge, it sells USD futures at 83.60. If INR appreciates to 83.00 at expiry, what is the profit?

41 / 50

41.

How are proprietary positions calculated for a Trading Member?

42 / 50

42.

An Authorised Person (AP) is related to which of the following entities?

43 / 50

43.

What is the fair price of a futures contract according to the cost of carry model?

44 / 50

44.

Which of the following is true for Netting?

45 / 50

45.

If a trader is short on a near-month contract and long on a far-month contract of the same futures, what type of position it represent?

46 / 50

46.

If you expect interest rates to rise in the future, today you should

47 / 50

47.

If a futures price is rising and open interest is also increasing, what does this indicate?

48 / 50

48.

A Paddy farmer buys weather insurance to protect from less rainfall. Its like a derivatives contract where the underlying is ____

49 / 50

49.

If a futures price is rising and open interest is also increasing, what does this indicate?

50 / 50

50.

Which of the following costs is not actually paid by the market participants but arises due to lack of liquidity?

Your score is

The average score is 75%

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NISM Series XIII Mock Test 19

NISM Series XIII Exam | Mock Test 19

1 / 50

1. The computation of turnover is a very important factor as the applicability of _________ is determined on the basis of turnover.

2 / 50

2. _________________ is an option that would lead to a negative cash flow if it were exercised immediately.

3 / 50

3.

What did the Dr. L. C. Gupta committee recommend in its report?

4 / 50

4. Find out the CROSS rate for GBP/AUD. Details : GBP/USD - 0.9891/0.9894,AUD/USD - 1.2287 /1.2289.

5 / 50

5. Bearish Vertical Spreads can be implemented by the use of _________.

6 / 50

6. A person has invested USD 100,000 in US equities with a view of appreciation of US stock market. In next one year, his investments in US equities appreciated in value to USD120,000. The investor decided to sell off his portfolio and repatriate the capital and profits to India. At the time of investing abroad the exchange rate was 44.5 and at the time of converting USD back into INR, he received an exchange rate of 46. How much is the return on investment in USD and in INR respectively?

7 / 50

7. The margins shall be collected /adjusted from the _________ assets of the member on a real time basis.

8 / 50

8.

What has contributed significantly to the growth of OTC derivatives market?

9 / 50

9. A _______ is an agreement made through an organized exchange to buy or sell a fixed amount of a commodity.

10 / 50

10. ___________ is the last day on which the futures contract will be traded, at the end of which it will cease to exist.

11 / 50

11. Tick size for Nifty futures is Rs 0.05.

12 / 50

12. In OTC currency derivative market in India, is it possible for a corporate to write an option and receive a net premium?

13 / 50

13. 2 Month Calendar Spread Margin for EURINR is _________.

14 / 50

14. The ___________ has a strong international presence and second-largest and second-most traded currency in the international markets.

15 / 50

15.

If the annual interest rate is 5% and the dividend yield on a stock is 2%, what is the six-month futures price of a stock currently trading at Rs 500 in the spot market?

16 / 50

16. The _______ deviation is calculated using the Exponential Weighted Moving Average (EWMA).

17 / 50

17. You already have a short futures position in USDINR at 44.5 and you are keen to reduce losses on this position if USDINR strengthens beyond 44.5 i.e., goes above 44.5. As stated above, you are not keen to pay any upfront cash to buy protection. What can you do?

18 / 50

18. Who decides on the tick size of a contract ?

19 / 50

19. Government securities & T-Bills can be considered as _________ of collateral deposits given to clearing corporation by its members.

20 / 50

20.

Operational risks in a financial context can include losses due to which of the following?

21 / 50

21.

Profits from derivatives transactions for Indian investors are taxed as: __________

22 / 50

22. When the index future is used to hedge against the market risk on a portfolio, then it can be called as a cross hedge.

23 / 50

23. A TM's open position is the ____________.

24 / 50

24. Clearing Corporation receives the details of trades and prices from the ___________.

25 / 50

25. A penalty or suspension of registration of a stock broker from derivatives exchange/segment under the SEBI (Stock Broker) Regulations, 1992 can take place if _______________.

26 / 50

26. Currently American options are not allowed in currencies in India.

27 / 50

27. Authorised persons cannot collect commission directly from the clients.

28 / 50

28. The maximum penalty for any member or client who increased the existing positions or created a new position in the security under Future & Option ban is __________.

29 / 50

29. Market risk or systematic risk can be reduced by using index derivatives.

30 / 50

30. The maximum loss limit, which the Risk Management system allows a member to sustain on a real-time basis, is ______ of the total deposit.

31 / 50

31. Convenience return for a commodity is likely to be different for different people, depending on the way they use it.

32 / 50

32. Theta is ___________.

33 / 50

33. You are the owner of a 15 million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty stands at 9000. Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want?

34 / 50

34. If the current price of bond is 101.7125 and its modified duration is 1.71, then price value of basis point will be ________.

35 / 50

35. What is a contract size?

36 / 50

36. For small value transactions, banks publish a standard price for the day called as card rate.

37 / 50

37. Traditionally, the _______ serves the function of production-consumption in international trade.

38 / 50

38. If USD interest rate were to remain stable and INR interest rate were to go up, then which position will be profitable _______.

39 / 50

39. The act of converting a fixed-rate loan into a floating-rate loan is _______.

40 / 50

40.

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

41 / 50

41. A trader in India expects international gold prices to appreciate from USD 1500 per ounce to USD 1800 in next six months. To benefit from the view, he buys 30 grams of gold at Rupees 22,000 per gram and also sold 6 month USDINR futures at 46. After six months, gold prices appreciated to USD 1800 per ounce and the trader sold gold at Rupees 24,000 per gram and unwinds currency futures contract at 44. Assuming 1 ounce is equal to 3 grams, how many lots of currency futures would he have used to hedge the currency risk and how much was the real return for the investor?

42 / 50

42. Final Settlement rate would be the _______ Reference rate for the date of expiry.

43 / 50

43. Gaurav Buys USD-INR 16 contracts (1 lot= USD 1000) at Rs. 49.25 per unit. If tick size is Re.0025 how much he will gain or lose if there is upward movement of 10 ticks?

44 / 50

44. In the Arbitration procedure, the arbitrator conducts the arbitration proceeding and passes the award normally within a period of _______months from the date of initial hearing.

45 / 50

45. The minimum net worth for the trading membership on the interest rate futures as of the latest balance sheet should be _______ for clearing member.

46 / 50

46. The relationship between bond price and yield to maturity is _______.

47 / 50

47.

Yield curve spread risk arises when the term structure shift is

48 / 50

48. When a client defaults in making payments in respect of a daily settlement, ______________.

49 / 50

49. You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs. 3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs)

50 / 50

50.

____ are derivatives with underlying as theoretical bond and not a physical bond

Your score is

The average score is 71%

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NISM Series XIII Mock Test 20

Practice. Review. Succeed – NISM Series XIII Made Easy.

"Get Real. Get Ready. Get Certified!"

1 / 50

1. One of the key difference in OTC and Exchange traded USD-INR currency option market is related to ___________.

2 / 50

2. The margins shall be collected /adjusted from the _________ assets of the member on a real time basis.

3 / 50

3. A company, which is due to receive a payment in a foreign currency on a future date, enters into a forward transaction with a bank agreeing to sell the foreign currency and receive a predetermined quantity of domestic currency. This is an example of Hedging.

4 / 50

4. Order lying unmatched in the system is called _____________.

5 / 50

5. Assume that price of a USD-INR call option is quoted as INR 0.25 / 0.27 (bid price / ask price). Given this quote, at what price could a company buy the call option?

6 / 50

6. If the coupon is linked to a specified ________, then only its timing but not its amount is known in advance.

7 / 50

7. You already have a short futures position in USDINR at 44.5 and you are keen to reduce losses on this position if USDINR strengthens beyond 44.5 i.e., goes above 44.5. As stated above, you are not keen to pay any upfront cash to buy protection. What can you do?

8 / 50

8. During the process of novation, the _______ becomes the buyer to the seller, and the seller to the buyer.

9 / 50

9. All derivative contracts should be recognised on the balance sheet and measured at __________ value.

10 / 50

10. The market wide limit of open position on futures and option contracts on a particular underlying stock should be _________.

11 / 50

11. In OTC currency derivative market in India, is it possible for a corporate to write an option and receive a net premium?

12 / 50

12. Authorised persons cannot collect commission directly from the clients.

13 / 50

13. _________ involves combination of options having same underlying but different expiries as well as different strikes.

14 / 50

14. When the index future is used to hedge against the market risk on a portfolio, then it can be called as a cross hedge.

15 / 50

15. A person has invested USD 100,000 in US equities with a view of appreciation of US stock market. In next one year, his investments in US equities appreciated in value to USD120,000. The investor decided to sell off his portfolio and repatriate the capital and profits to India. At the time of investing abroad the exchange rate was 44.5 and at the time of converting USD back into INR, he received an exchange rate of 46. How much is the return on investment in USD and in INR respectively?

16 / 50

16. Some of the important announcements from central bank meetings are their ___________.

17 / 50

17. In a system of 100 currencies with no vehicle currencies, potentially there would be ____ currency pairs or exchange rates.

18 / 50

18. In a two way quote, the prices quoted for buying is called ______ and the price quoted for selling is called as _________.

19 / 50

19. If USD interest rate were to remain stable and INR interest rate were to go up, then which position will be profitable _______.

20 / 50

20. Initial margin collection is monitored by the _________.

21 / 50

21. What is a contract size?

22 / 50

22. A penalty or suspension of registration of a stock broker from derivatives exchange/segment under the SEBI (Stock Broker) Regulations, 1992 can take place if _______________.

23 / 50

23. The ___________ has a strong international presence and second-largest and second-most traded currency in the international markets.

24 / 50

24. Settlement Price of Daily mark to market settlement will be the closing price of the futures contracts for the trading day and the final settlement price shall be the RBI reference rate for last trading date of the contract.

25 / 50

25. Covered calls carry greater risk than Naked Calls - True or False ?

26 / 50

26. Initial margin requirements shall be based on 99% _________ over a one day time horizon.

27 / 50

27. The amount of cash lent is less than the market value of the security, and the difference is called __________ (in other markets).

28 / 50

28. Specific risk (A component of Price Risk) cannot be completely avoided while investing in securities.

29 / 50

29. Which user is at the lowest level in the heirarchy of trading firm?

30 / 50

30. Find out the Intrinsic value of a CALL option of ABC. Spot is Rs 2000. Strike is Rs 2020.

31 / 50

31. Accounting standards like IAS 39 and AS 30 require the ____________ criteria to be satisfied for financial derivatives.

32 / 50

32. The amount that must be deposited in the margin account at the time a futures contract is first entered into is known as _________.

33 / 50

33. The _______ deviation is calculated using the Exponential Weighted Moving Average (EWMA).

34 / 50

34. The exposure of the banks, on their own account, in the currency futures market shall form part of the _______________.

35 / 50

35. As a trader you believe EURUSD will move from 1.58 to 1.44 in next 2 months. Which of the following would you do to execute this view using currency futures contract of EURINR and USDINR?

36 / 50

36. The computation of turnover is a very important factor as the applicability of _________ is determined on the basis of turnover.

37 / 50

37. A trading member has two clients in currency futures segment and one client in currency option segment. During the day, each of the clients in currency futures segment sold 6000 USD and bought 3000 USD. At the end of a trading day, each of the client in currency futures segment have 6000 USD short position and 3000 USD long position. Additionally, the currency option client has 3000 USD long position. What is the gross open position for the trading member for the purpose of monitoring open position

38 / 50

38. If the interest rate goes up, the price of rate-sensitive instruments also increases.

39 / 50

39. Which is the most active currency pair in the world?

40 / 50

40. Imagine a trader buys a contract (USD 1000 being the value of each contract) at Rs. 42.2500. If he buys 5 contracts and the price moves up by 4 ticks, what will be his profit or loss? (Tick size 0.25 paisa ignore transaction cost)

41 / 50

41. Market risk or systematic risk can be reduced by using index derivatives.

42 / 50

42. Unsystematic risk can be reduced by portfolio diversification.

43 / 50

43. The exchanges are responsible for specifying _______.

44 / 50

44. You are the owner of a 15 million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty stands at 9000. Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want?

45 / 50

45. A ______________ position is created by selling a call and a put option of same strike.

46 / 50

46. Mr. Ketan wants to shift funds from Indian Rupees to Philippine Pesos. He sells INR for US Dollars and then sells the US Dollars for Pesos. In this transaction, US Dollar is working as:

47 / 50

47. What is IOC order?

48 / 50

48. Naked position in futures market simply means a long or short position in any futures contract without having any position in the underlying asset.

49 / 50

49.  

Rahul owns five hundred shares of ABC Ltd. Around budget time, he gets uncomfortable with the price movements. Which of the following will give him the hedge he desires (assuming that one ABC futures contract = 100 shares) ?

50 / 50

50. Position Limit for a Bank TM on EURINR is:

Your score is

The average score is 72%

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NISM Series XIII Mock Test

Here are 150 sample MCQs to help you prepare for the NISM Series XIII: Common Derivatives Certification Examination.

1 / 150

1. Interoperability of clearing corporation framework is allowed all the products
available in the Indian securities markets, EXCEPT:

2 / 150

2. Credit spread is the price of ___________.

3 / 150

3. The difference between option premium and intrinsic value is __________.

4 / 150

4. Total number of derivatives contracts outstanding is called __________

5 / 150

5. Find out the Intrinsic value of a CALL option of ABC. Spot is Rs 2000. Strike is Rs 2020.

6 / 150

6. Which of the following is true?

7 / 150

7.  

Rahul owns five hundred shares of ABC Ltd. Around budget time, he gets uncomfortable with the price movements. Which of the following will give him the hedge he desires (assuming that one ABC futures contract = 100 shares) ?

8 / 150

8.

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

9 / 150

9. If participant buy 10 lot of single bond futures at Rs. 99, then contract value _________.

10 / 150

10. Assume you are an exporter, and you want to sell USD that you have received as
export remittance. The bank quotes a price of 75.10 / 75.12 for USDINR. At what price
can you sell one unit of USD?

11 / 150

11. SEBI-registered brokers can introduce DMA facility to their clients after obtaining permission from respective ____________.

12 / 150

12. The yield to maturity amortizes the capital gain or loss at redemption over the bond's life and adds it to the _______.

13 / 150

13. RBI guideline on Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2019 permit _______________ to participate in interest rate derivatives contract.

14 / 150

14. You are the owner of a 15 million portfolio with a beta 1.0. You would like to insure your portfolio against a fall in the index of magnitude higher than 10%. Spot Nifty stands at 9000. Put options on the Nifty are available at three strike prices. Which strike will give you the insurance you want?

15 / 150

15. When the forex strike rate increases, the put option premium _______.

16 / 150

16. A penalty or suspension of registration of a stock broker from derivatives exchange/segment under the SEBI (Stock Broker) Regulations, 1992 can take place if _______________.

17 / 150

17. Market risk or systematic risk can be reduced by using index derivatives.

18 / 150

18. Which act empowers SEBI to regulate securities markets?

19 / 150

19.

Assume that on 1st December 2020, USD-INR spot was at 45, premium for January 2021 maturity put option at strike of 45.5 is INR 0.54/0.55 and premium for January 2021 maturity call option at strike of 45 is INR 0.71/0.72. A client executes a trade wherein he buys put at a strike of 45.5 and sells a call at a strike of 45. On expiry the RBI reference rate is 44.75. How much net profit/loss did the client make per USD?

20 / 150

20. If a member has payable obligation towards pay-in as well as margins, then ________.

21 / 150

21. Which of the following derivatives have the largest market size globally?

22 / 150

22. For equity derivatives, carrying cost is the interest paid to finance the purchase less (minus) dividend earned.

23 / 150

23. Which of the following is true about put options?

24 / 150

24. Usually, income from Exchange traded derivatives is treated as _________.

25 / 150

25. The ___________ has a strong international presence and second-largest and second-most traded currency in the international markets.

26 / 150

26. A Buy or a Sell order(s) which is/are lying unmatched in the order book are known as ________________.

27 / 150

27. The _______ deviation is calculated using the Exponential Weighted Moving Average (EWMA).

28 / 150

28. The initial margin amount is large enough to cover a one day loss that can be encountered on ________ of the days.

29 / 150

29.  What best describes a derivative?

30 / 150

30. The price which option buyer pays to option seller to acquire the right is called as ___________.

31 / 150

31. A covered call strategy involves:

32 / 150

32. Convenience return for a commodity is likely to be different for different people, depending on the way they use it.

33 / 150

33. The minimum net worth required for a Clearing Member is:

34 / 150

34. An option is _________, if on exercising it, the option buyer gets positive cash flow.

35 / 150

35. Gaurav Buys USD-INR 16 contracts (1 lot= USD 1000) at Rs. 49.25 per unit. If tick size is Re.0025 how much he will gain or lose if there is upward movement of 10 ticks?

36 / 150

36. Which of these is true about a European Option?

37 / 150

37. A trader shorted a future at ₹1,000. Price rose to ₹1,050. The loss is:

38 / 150

38. The interest rate on ______ is the benchmark for determining the interest rate on other debt instruments.

39 / 150

39. If an Option has a high Gamma, what can be said about Option’s Delta?

40 / 150

40. Position limit for EURUSD at trading member level is?

41 / 150

41. Which organization guarantees financial settlement in derivatives?

42 / 150

42. The difference between option premium and intrinsic value is __________.

43 / 150

43. Bearish Vertical Spreads can be implemented by the use of _________.

44 / 150

44. What should the affected stock exchange do to restore normalcy of operations during an outage?

45 / 150

45.

When a client defaults in making payments in respect of a daily settlement, the contract is closed out. The amount not paid by the client is adjusted against the ___

46 / 150

46. A company, which is due to receive a payment in a foreign currency on a future date, enters into a forward transaction with a bank agreeing to sell the foreign currency and receive a predetermined quantity of domestic currency. This is an example of Hedging.

47 / 150

47.

How are proprietary positions calculated for a Trading Member?

48 / 150

48.

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

49 / 150

49. A person has invested INR 100,000 in an Indian corporate bond for a year giving a
return of 16% in one year. The person plans to use the proceeds from the maturity of
corporate bond to fund his son's education on US. At the time of investing in the
corporate bond, USDINR spot rate was 70 and one year premium was 4%. The person
decides to hedge currency risk using USDINR one year futures. At the end of one year,
how many USD can this person remit to his son.

50 / 150

50.

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

51 / 150

51. In case of Clearing Member default, which funds are used first?

52 / 150

52. Maximum loss for a short straddle is:

53 / 150

53. Which of the following qualifies as Liquid Assets for margin?

54 / 150

54. Which of the following instruments is used for hedging index exposure?

55 / 150

55. Operational risks include losses due to ____________.

56 / 150

56.

The market value of one contract is 2,000 times the quoted price and the market price is 106.10, the face value of 200,000. Compute the market value.

57 / 150

57.

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

58 / 150

58. When the index future is used to hedge against the market risk on a portfolio, then it can be called as a cross hedge.

59 / 150

59.

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?

60 / 150

60. Which is the most active currency pair in the world?

61 / 150

61. The relationship between bond price and yield to maturity is _______.

62 / 150

62. In India, index derivatives are available on:

63 / 150

63. Initial margin requirements shall be based on 99% _________ over a one day time horizon.

64 / 150

64. The futures hedge is simultaneously exposed to both basis risk and yield curve spread risk.

65 / 150

65.

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

66 / 150

66.

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

67 / 150

67. Which one is true about SEBI’s regulation on derivatives?

68 / 150

68. Which of these is NOT a characteristic of a forward contract?

69 / 150

69. 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 the Trading Member?

70 / 150

70. The current yield cannot be considered as true return because it does not consider the ________.

71 / 150

71. Margin money in futures contracts is meant to:

72 / 150

72. Government securities & T-Bills can be considered as _________ of collateral deposits given to clearing corporation by its members.

73 / 150

73. Following derivatives contracts are traded only on Exchanges?

74 / 150

74. Which user is at the lowest level in the heirarchy of trading firm?

75 / 150

75. Which of these best defines basis in futures trading?

76 / 150

76. A Buy or a Sell order(s) which is/ are lying unmatched in the order book are known as
________________.

77 / 150

77.

Margins across the various clients of a member are collected on a gross basis

78 / 150

78. In India, currency futures are regulated by:

79 / 150

79.

A trader feels that INR should depreciate against USD in next few months. What currency futures trade will be profitable to him if his views comes correct?

80 / 150

80. Clearing members are responsible for:

81 / 150

81.

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

82 / 150

82. Interoperability of clearing corporation framework is allowed for all the products available in the Indian securities markets, EXCEPT: __________.

83 / 150

83. The computation of turnover is a very important factor as the applicability of _________ is determined on the basis of turnover.

84 / 150

84. Usually, income from Exchange traded derivatives is treated as _________.

85 / 150

85. An institution buys a put option on 10Y G-Sec at strike 98. If price falls to 96, what is the intrinsic value?

86 / 150

86.

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?

87 / 150

87. Which one of the following statements is FALSE?

88 / 150

88.

The lot size for EURINR futures contract is

89 / 150

89. What is the settlement method for USDINR futures?

90 / 150

90.

If the annual interest rate is 5% and the dividend yield on a stock is 2%, what is the six-month futures price of a stock currently trading at Rs 500 in the spot market?

91 / 150

91. Unsystematic risk can be reduced by portfolio diversification.

92 / 150

92.

An importer takes a long position in USDINR futures contract at a price of 53 by buying 20 lots. At the  expiry, the settlement price is 54.3. how much profit or loss did the importer make?

93 / 150

93.

Daily Mark to market settlement of Exchange traded interest rate future contract is __________.

94 / 150

94. On the derivative exchanges, all the orders entered on the Trading System are at prices exclusive of brokerage.

95 / 150

95.

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?

96 / 150

96. Order lying unmatched in the system is called _____________.

97 / 150

97. Traditionally, the _______ serves the function of production-consumption in international trade.

98 / 150

98. 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 ?

99 / 150

99. A person has invested USD 100,000 in US equities with a view of appreciation of US stock market. In next one year, his investments in US equities appreciated in value to USD120,000. The investor decided to sell off his portfolio and repatriate the capital and profits to India. At the time of investing abroad the exchange rate was 44.5 and at the time of converting USD back into INR, he received an exchange rate of 46. How much is the return on investment in USD and in INR respectively?

100 / 150

100. State whether TRUE or FALSE: Impact cost is low when the liquidity in the system is poor.

101 / 150

101.

Guidance Notes on Accounting for Derivatives Contract recognise following type of hedging for hedge accounting: ____________.

102 / 150

102.

A company expects to receive USD 100,000 in 2 months. Current USDINR is 83.40. To hedge, it sells USD futures at 83.60. If INR appreciates to 83.00 at expiry, what is the profit?

103 / 150

103.

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

104 / 150

104. Which category of market participants seeks to reduce risk exposure?

105 / 150

105. Which Greek indicates the impact of time decay on an option?

106 / 150

106. What is “Impact cost” in the context of an index?

107 / 150

107. The most traded currency pair is:

108 / 150

108.  Which of the following is a non-deliverable forward (NDF)?

109 / 150

109.

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

110 / 150

110. Nifty and Sensex originally followed which methodology?

111 / 150

111. Which of the following is NOT an example of a derivative?

112 / 150

112. _______ is the price that is used to compute the price range for the opening trade on any trading day.

113 / 150

113. __________ net worth shall be computed as liquid assets less initial margin and extreme loss margin payable at any point in time.

114 / 150

114.

A Professional Clearing Member of derivatives segment _______

115 / 150

115.

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?

116 / 150

116. If implied volatility increases, which of the following increases in value?

117 / 150

117.

If 1 year interest rate is 2% in USA and 10% in India, and USDINR is at 44, what is the expected 6 month future rate?

118 / 150

118. A calendar spread contract in index futures attracts ___________.

119 / 150

119. The ____________ model was developed by William Sharpe in 1978.

120 / 150

120.

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

121 / 150

121. Which of the following is the last trading day for cash settled 10-year bond futures?

122 / 150

122. A trader sells a future and buys the same stock. He is:

123 / 150

123. What is the Base Minimum Capital requirement specified by the SEBI for only
Proprietary trading without Algorithmic trading (Algo)?

124 / 150

124. Derivative transactions before FY 2005–06 were considered:

125 / 150

125. Which of the following has higher credit risk?

126 / 150

126. The counterparty risk in exchange-traded derivatives is borne by:

127 / 150

127. In an interest rate swap, the floating leg is typically tied to:

128 / 150

128. Securities Transaction Tax (STT) in case of Sale of an option in securities is payable by_______.

129 / 150

129. As a trader you believe EURUSD will move from 1.58 to 1.44 in next 2 months. Which of the following would you do to execute this view using currency futures contract of EURINR and USDINR?

130 / 150

130.

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

131 / 150

131.

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

132 / 150

132. If an option is exercised, the STT is applicable on:

133 / 150

133.

You expect GBP/USD to rise from 1.63 to 1.68. How should you trade GBP/INR & USD/INR futures?

134 / 150

134.

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

135 / 150

135. A penalty or suspension of registration of a stock broker from derivatives exchange/segment under the SEBI (Stock Broker) Regulations, 1992 can take place if _______________.

136 / 150

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

137 / 150

137.

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

138 / 150

138. The investor has the right to demand prepayment on specified dates before maturity in case of _______.

139 / 150

139. SEBI was established under which year’s Act?

140 / 150

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

141 / 150

141.

Identify the contract which is cleared and settled bilaterally

142 / 150

142. ______ specifies how to convert the payment period into year fraction.

143 / 150

143.

___ is the process of computing open positions and determining mark to market margins

144 / 150

144.

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

145 / 150

145.

A ________ order is classified as price related condition.

146 / 150

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

147 / 150

147. The margins shall be collected /adjusted from the _________ assets of the member on a real time basis.

148 / 150

148. The purpose of interest rate swaps is to:

149 / 150

149. A put option becomes profitable when:

150 / 150

150. A speculator's aim in derivatives is to:

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MOCK TEST – NISM Series XIII: Common Derivatives Certification Exam
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