NISM Series VIII - Equity Derivatives Paper - 16
| Q1.You sold a Put option on a share. The strike price of the put was Rs.245 and you received a premium of Rs.49 from the option buyer. Theoretically, what can be the maximum loss on this position? |
| 206 |
| 196 |
| 49 |
| NIL |
| Q2.A person has bought an option so cannot lose more than the option premium paid. |
| False for all types of options |
| True only for American options |
| True only for European options |
| True for all types of options |
| Q3.Three Call series of the same strike price of State Bank of India stock-June, July, and August are quoted. Which will have the lowest option premium? |
| The same premium for all |
| June |
| July |
| August |
| Q 4. The Clearing Corporation can transfer a defaulting member's client's position to _____. |
| Liability a/c. |
| Another solvent member |
| Investor Protection Fund a/c. |
| The Stock Exchange |
| Q 5.Mr. Nayar has purchased 8 contracts of the March series and sold 6 contracts of the April series of the NSE Nifty futures. How many lots will get categorized as Regular (non-spread) open positions? |
| 14 |
| 8 |
| 2 |
| 6 |
| Q6.___ measures the sensitivity of the option value to a given small change in the price of the underlying asset. |
| Delta |
| Theta |
| Rho |
| Vega |
| Q 7.Of the below-mentioned options, which would attract margins? |
| Buyer of PUT Option |
| Seller of CALL Option |
| Seller of PUT Option |
| Both 2 and 3 |
| Q8.Mr. Singh purchases a call option on a stock at Rs. 10 per call with a strike price of Rs. 140. If on the exercise date, the stock price is Rs. 168, ignoring transaction cost, Mr. Singh will choose ____ |
| To exercise the option |
| Not to exercise the option |
| May or may not be depending on the balance he has in his bank account |
| May or may not depend on the recommendation of experts |
| Q 9. You have bought a CALL of ITC Ltd. of Strike price of Rs 200 of January. To close the position, you will SELL a PUT of the same strike price as January. True or False? |
| False |
| True |
| Q10.What does a beta of more than 1 mean? |
| It means that the expected percentage change in stock price will be twice the percentage change in the index |
| It means that the expected percentage change in stock price will be less percentage change in the index |
| It means that the expected percentage change in stock price will be more than the percentage change in the index |
| It means that the expected percentage change in stock price equals the percentage change in the index |