NISM Series VIII - Equity Derivatives Paper - 15
| Q1.Which of these statements is True? |
| Money and securities deposited by clients can be attached for meeting the broker's obligation on his proprietary account |
| Money and securities deposited by clients cannot be attached for meeting the brokers obligation on his proprietary account |
| Money and securities deposited by clients can be attached as per the decision of the clearing corporation |
| Money and securities deposited by clients can be attached as per the decision of the Stock Exchange |
| Q 2.Initial margin to be paid in derivatives is set up taking into account the volatility of the underlying market. Generally ___ |
| Lower the volatility, higher the initial margin |
| Higher the volatility, lower the initial margin |
| Higher the volatility, higher the initial margin |
| None of the above |
| Q3.Meghna wants to sell 34 contracts of ABC futures at Rs. 2450 (contract multiplier is 50). The initial margin is 7%. How much will be the initial margin to be paid ? |
| Rs. 4165000 |
| Rs. 83300 |
| Rs. 5831 |
| Rs. 291550 |
| Q4.In the derivatives market, as the strike price goes down, the premium of PUT option ___ |
| will increase |
| will decrease |
| there will be no change |
| can increase or decrease |
| Q5.Can the exercise price be more than or equal to or less than the cash spot price? |
| Yes |
| No |
| Q 6. In a derivative segment, the initial margin is collected from the clearing member on a net basis ie. after netting all buy and sell positions of all clients together - State True or False? |
| True |
| False |
| Q7.Derivatives brokers/ dealers are expected to know their clients and to exercise care to ensure that the derivative product being sold by them to a particular client is suitable to his understanding and financial capabilities - State True or False? |
| True |
| False |
| Q 8. Trading is allowed in Indian Equity markets in which of the following - |
| Index Options |
| Individual stock options |
| Individual stock futures options |
| All of the above |
| Q 9. A seller of call option can lose unlimited amount of money - State True or False? |
| True |
| False |
| Q 10. Suppose you are a trading member and have bought 14 contracts of April series index futures and sold 7 contracts of April series index futures on your own account. What will be your exposure on these transactions ? |
| It will gross up to 21 contracts |
| It will be netted to 7 contracts |
| Higher of 14 and 7 ie. 14 contracts |
| The Stock Exchange can decide to either to gross-up or net out the exposure depending on the past record of the trading member |