Derivative Question - Set 1
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1. This is a Mock Examination of NISM-Series-XVIII: Financial Education Certification Examination.
2. This mock test has 50 questions of 1 marks each. Please note that the actual examination for NISM Series XVIII: Financial Education Certification Examination has 50 questions of 1 mark each.
3. There is no negative marking.
4. The passing score for the examination is 60%
5. This mock examination is only to give the candidates an experience of NISM testing system.
6. Please note that passing this mock test would not make you eligible for claiming a certificate for NISM-Series-XVIII: Financial Education Certification Examination.
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Question 1 of 25
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
Question 2 of 25
The following are the details of trading member ratanlal’s proprietary and client position: propritary : he buys 600 units@1020 and sells 1800 units @1025.client A : he buys 2000 units @ 1015.client B : he buys 1600 units @ 1016 and sells 800 units @ 1022.The settlement price of the day is 1023. What is MTM profit/loss for Ratanlal?
Question 3 of 25
An option which would give a negative cash flow to its holder if it were exercised immediately is known as _______ .
Question 4 of 25
Deepak is bullish about the index. spot nifty stands at 10,950. he decides to buy one three-month nifty call option
contract with a strike of 10600 at Rs.500 per call. at expiry, the index closes at 11,200. Nifty lot size – 75. His payoff on the
Question 5 of 25
Securities and Exchange Board (SEBI) is the regulatory authority in India established with statutory powers for
Question 6 of 25
Trading member shantilal took proprietary purchase in a march contract. he bought 1600 units @ 1200 and sold 1200 @
1220. The end of day settlement price was 1221. What is the outstanding position on which initial margin will be calculated?
Question 7 of 25
Cash dividend is an example of ______________
Question 8 of 25
Scrips or portfolios having beta greater than 1 are called aggressive scrips or portfolios respectively.
Question 9 of 25
A protective put payoff is similar to that of ___________
Question 10 of 25
Limited Loss and Potential Unlimited Profit is the risk reward for
Question 11 of 25
__________is not an example for Derivative Contracts
Question 12 of 25
Convenience return for a commodity is likely to be different for different people, depending on the way they use it.
Question 13 of 25
Long Straddle is a strategy with __________
Question 14 of 25
Price that is agreed upon at the date of the contract for the delivery of an asset at a specific futures date is called _______.
Question 15 of 25
Variability in a security?s total returns that are directly associated with overall movements in the general market or
economy is called systematic risk
Question 16 of 25
The parties for the Futures contract have the flexibility of closing out the contract prior to the maturity by squaring off the
transactions in the market. State true or false.
Question 17 of 25
In the accounting system of open options as on Balance Sheet day, the “Provision for Loss on Equity Index/ stock Option
Account” is shown as deduction from “Equity Index/ stock Option Premium” which is shown under________________.
Question 18 of 25
Equity Index Options are a form of _________.
Question 19 of 25
Tick size for an index future contract is 5 Paise and the lot size is 100 units.A single move in the index value would imply a
resultant gain or loss of
Question 20 of 25
ABC company futures is trading at Rs. 3975 and an investor buys a 4000 call for current month for Rs. 100. What should
be the closing price of ABC company for the investor to start make Profits if he holds his long option position? 1 lot of ABC
company = 50 shares.
Question 21 of 25
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?
Question 22 of 25
What could be the maximum profit for a Buyer of Options Contract
Question 23 of 25
Time value of an option is maximum in case of _______
Question 24 of 25
Short Hedge is a transaction when the hedge is accomplished by going short in futures market
Question 25 of 25
In an equity scheme, fund can hedge its equity exposure by selling stock index futures.