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

2.

Identify the contract which is cleared and settled bilaterally

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

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

5.

The lot size for EURINR futures contract is

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

7. 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.

8.

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

9.

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

10. 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?

11. Which of the following has higher credit risk?

12.

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?

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

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

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

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

17.

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?

18.

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

19. Which one of the following statements is FALSE?

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

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

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

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

24.

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?

25.

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

26. In India, currency futures are regulated by:

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

28. The most traded currency pair is:

29.  

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) ?

30.

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?

31. 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?

32.

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

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

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

35. Which act empowers SEBI to regulate securities markets?

36. Clearing members are responsible for:

37.

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

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

39. Following derivatives contracts are traded only on Exchanges?

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

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

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

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

44.

A ________ order is classified as price related condition.

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

46.  What best describes a derivative?

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

48.

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?

49.

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

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

51. 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 _______________.

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

53. 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 _______________.

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

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

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

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

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

59. What is the settlement method for USDINR futures?

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

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

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

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

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

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

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

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

68. 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 ?

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

70.

How are proprietary positions calculated for a Trading Member?

71.

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

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

73. 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?

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

75. Operational risks include losses due to ____________.

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

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

78. 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?

79. Nifty and Sensex originally followed which methodology?

80. In India, index derivatives are available on:

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

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

83. A covered call strategy involves:

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

85.

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?

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

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

88.

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

89. Total number of derivatives contracts outstanding is called __________

90. 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?

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

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

93.

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.

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

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

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

97.

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 ___

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

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

100.

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?

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

102. A put option becomes profitable when:

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

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

105. Which of the following is true?

106. Unsystematic risk can be reduced by portfolio diversification.

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

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

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

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

111.

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

112.

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

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

114.

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

115.

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

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

117.

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

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

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

120. Which organization guarantees financial settlement in derivatives?

121.

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

122. Margin money in futures contracts is meant to:

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

124. Maximum loss for a short straddle is:

125.

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

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

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

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

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

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

131.

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

132.

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

133. The purpose of interest rate swaps is to:

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

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

136. 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?

137.

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

138.

A Professional Clearing Member of derivatives segment _______

139.

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?

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

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

142. 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.

143.

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?

144.

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

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

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

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

148.

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?

149. Credit spread is the price of ___________.

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