NISM Series VIII - Equity Derivatives Paper - 03
| Q1.When would a trader make a profit on a short position of September futures? |
| when he buys an October future at a lower price |
| when he sells another September future at a lower price |
| he squares of this short position by buying the September future at a lower price |
| when he sells October futures at a lower price. |
| Q2.A clearing member is required to bring in additional incremental deposits of __ to the clearing corporation for each additional TM he undertakes to clear and settle deals. |
| Rs.5 lakhs |
| Rs.10 lakhs |
| Rs.15 lakhs |
| Rs.20 lakhs |
| Q3.Stock Brokers are allowed to fund the margin requirements of their clients. Is the state True or False? |
| True |
| False |
| Q 4.A call option is said to be ___ when the spot price is higher than the strike price. |
| At the money |
| Out of the money |
| In the money |
| European |
| Q5.The mark-to-market margin debits for stock futures are done on a daily basis but the mark-to-market margin credits are done on a weekly basis - State whether True or False ? |
| True |
| False |
| Q6.Futures trading is considered riskier than equity trading due to ___. |
| high leverage |
| High pressure |
| high volatility |
| high liquidity |
| Q7.You have sold a CALL option on a stock at Rs. 16 per call with a strike price of Rs. 170. If on the exercise date, the stock price is Rs. 196, ignoring transaction cost, you will choose ____. |
| to exercise the option |
| not to exercise the option |
| may or may not exercise the option depending on the company's background |
| none of the above |
| Q 8. Does a naked call option mean that the writer does not currently own the underlying - State True or False? |
| True |
| False |
| Q9.The Ask price is always greater than the Bid price. |
| False |
| True |
| Q 10. The initial margin is always equal to the mark-to-market margin - State True or False? |
| True |
| False |