Derivative Question - Set 22
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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
The operating range applicable in the Index option is _____
Question 2 of 25
Longer the time to expiry/maturity of a call option, higher will be the time value.
Question 3 of 25
An open interest is the total number of contracts traded in a month for an underlying asset
Question 4 of 25
__________ of the option is the one who receives the option premium and is thereby obliged to sell/buy the asset if the
buyer exercises on him.
Question 5 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 6 of 25
Limited Profit and Potential Unlimited Loss is the risk reward for
Question 7 of 25
The intrinsic value is the difference between Market Price and Strike Price of the option and it can never be negative.
Question 8 of 25
It is recommended but not compulsory for the trading members to have dealers and sales personal in the derivatives
market who have passed a certification programme approved by SEBI – State True or False ?
Question 9 of 25
If a trader buys a PUT option with Strike Price of Rs 500 for Rs 20 ( Lotsize = 400) , then the maximum possible loss is
Question 10 of 25
A Short Hedge is a deal that produces risk free profits by exploiting a mispricing in the market
Question 11 of 25
Over priced and underpriced futures are opportunities for
Question 12 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 13 of 25
A trader sells a future contract and prices rises. The trader will ______ if he squares up the position.
Question 14 of 25
To be eligible for trading in derivatives segment, stock should be in the top 500 in terms of _______
Question 15 of 25
The initial margin amount is large enough to cover a one day loss that can be encountered on ___ % of the days
Question 16 of 25
An index to be eligible for derivative trading should not consist of ineligible stocks having a weightage of
_____________in the index.
Question 17 of 25
What is the intrinsic value of a CALL Option at Strike Rs 880 and Spot Rs 900
Question 18 of 25
Spot value of nity is 11,000. An investor bought a one month nifty 11,200 call option for a premium of Rs 100. The option is
Question 19 of 25
Anuj sold ABC Ltd call with strike Rs 240 at Rs 25. The market lot size of ABC Ltd is 1200. What will be his pay off if he
purchases the call at Rs 30 to square off his position?
Question 20 of 25
Specific risk or unsystematic risk is the component of price risk that is unique to particular events of the company and/or
Question 21 of 25
For an index to be eligible for trading in derivatives segment, weightage of constituent stocks of the index, which are
individually eligible for derivatives trading, should be __________
Question 22 of 25
A stock is currently selling at Rs. 50. The call option to buy the stock at Rs.45 costs Rs.9. What is the time value of the
Question 23 of 25
There is a risk of execution of only one leg of an arbitraging transaction due to the lack of liquidity in another leg while
dealing in a electronic trading system. It might open the arbitrager to the naked exposure of a position.
Question 24 of 25
Which of the following is NOT a hedge for a long position in an underlying stock?
Question 25 of 25
_______________ involves same strike, same type but different expiry options