NISM series viii equity derivatives paper 20

Q (1): 

Institutional investors pay higher margins than the individual investors for derivatives trading - State True or False

  True

  False

Q (2): 

A butterfly spread is an extension of ______________ strategy.

  Covered call

  Long straddle

  Short straddle

  Long Strangle

Q (3): 

Even though there are no price bands applicable in derivatives segment, to avoid erroneous order entry operating price ranges are kept and the operating price range for index futures is _______________

  5%

  10%

  15%

  20%

Q (4): 

In which options is the strike price better than the market price and therefore it’s profitable to exercise the option ?

  At the money option

  In the money option

  Out of the money option

  Profitable money option

Q (5): 

Mr. A is a risk averse investor. He would prefer secure investments like fixed deposits and other debt instruments and not market oriented investments - State True or False ?

  True

  False

Q (6): 

NISM stands for ____________

  National Institution of Security Market

  National Institute of Stock Markets

  National Institute of Securities Markets

  National Integrated Stock Market

Q (7): 

On expiry, the settlement price of an index futures contract is

  opening price of futures contract

  closing index value

  closing price of futures contract

  opening index value

Q (8): 

Options which can be exercised only on the expiration date are _________ options.

  American Options

  Indian Options

  European Options

  Commodity Options

Q (9): 

The absolute amount of minimum capital adequacy requirement for derivative brokers is same as that for cash market - True or False ?

  True

  False

Q (10): 

The Non-Cash Component of Liquid Assets which are given as a form of margin can include Equity Shares which are physical form - True or False ?

  False

  True