Derivative Question - Set 23
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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
_________ of the option is the one who by paying the option premium buys the right but not the obligation to exercise his
option on the seller/writer.
Question 2 of 25
Three Call series of ABC stock – February, March and April are quoted. Which will have the highest Option Premium (same
Question 3 of 25
Spot value of Nifty is 10400. an investor buys a one month nifty 11000 call option for a premium of 7. The option is
Question 4 of 25
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
Question 5 of 25
A corporate manager can
Question 6 of 25
An arbitrage is a deal that produces risk free profits by exploiting a mispricing in the market
Question 7 of 25
A calendar spread becomes a naked or open position, when the near month contract expires or either of the legs of spread
Question 8 of 25
Branch manager can view trade and order related details of all dealers under that branch. True or false?
Question 9 of 25
Which of the following should be disclosed separately for long and short positions in respect of each series of equity index
futures as of the balance sheet date
Question 10 of 25
Manoj 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 futures contract = 100 shares) ?
Question 11 of 25
Calendar spread position is a combination of two positions in futures on the different underlying – long on one underlying
and short on a different underlying
Question 12 of 25
When a client has increased his existing positions or has created a new position in the security under F/O ban, the
client/trading members will be subject to a penalty of _________
Question 13 of 25
Initial margin collection is monitored by the _________.
Question 14 of 25
Expectedly falling market is called Contango Market.
Question 15 of 25
In equity derivatives segment, if a stock fails to meet the retention criteria for three months consecutively ,
Question 16 of 25
ABC futures is trading at Rs. 3325 and an investor buys a 3400 call for current month for Rs. 100. What should be the
break even point? 1 lot of ABC = 50 shares.
Question 17 of 25
The main objective of Trade Guarantee Fund (TGF) at the exchanges is _________________.
Question 18 of 25
Mr.X purchases 100 Put Option on Stock S at Rs 30 Per Call with Strike Price of Rs 280. If on Exercise date, Stock Price is
Rs 350, ignoring transaction cost, Mr.X will choose
Question 19 of 25
Capacity of derivatives market to absorb buying/selling by hedgers is directly dependent upon availability of traders, who
act as counter-party to hedgers
Question 20 of 25
An index put option at a strike of Rs 11200 is selling at a premium of Rs 50 At what index level will it break even for the
buyer of the option
Question 21 of 25
Which user is at the highest level in the heirarchy of trading firm?
Question 22 of 25
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.
Question 23 of 25
Which of the following positions has a limited downside ____
Question 24 of 25
Value-at-risk provides the ______________.
Question 25 of 25
____________is required to be paid on assigned positions of Clearing Members towards final exercise settlement
obligations for stock option contracts