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NISM Currency Derivatives – 1

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By admin January 25, 2017Posted iniexamworld, NISM, NISM Currency Derivatives, NISM Mutual Fund, Stock Market

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NISM Currency Derivatives – 1

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NISM Currency Derivatives - 1

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Question 1 of 100

1. Question
1 points
Nifty is a ________ index
- well diversified
- poorly diversified
- balanced
- volatile
Correct

Incorrect
Question 2 of 100

2. Question
1 points
________can be bought and sold on an exchange like shares.
- ETFs
- Index Funds
- Fixed deposits
- None of the above
Correct

Incorrect
Question 3 of 100

3. Question
1 points
Financial derivatives provide the facility for __________.
- Speculation
- Hedging
- Arbitraging
- All of the above
Correct

Incorrect
Question 4 of 100

4. Question
1 points
The first exchange traded financial derivative in india commenced with the trading of
- index futures
- index futures
- stock options
- stock options
Correct

Incorrect
Question 5 of 100

5. Question
1 points
In case of open position of any mutual fund scheme exceeding the specified limit , the penalty charged on the clearing member for each day of violation would be
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is lower
- 1 percent of the value of the quantity in violation per client or Rs.1,00,000 per client, whichever is lower
- 1 percent of the value of the quantity in violation per client or Rs.5,00,000 per client, whichever is lower
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is higher
Correct

Incorrect
Question 6 of 100

6. Question
1 points
For an index to be eligible for trading in derivatives segment, weightage of constituent stocks of the index, which are individually eligible for derivatives trading, should be __________
- atleast 20 percent
- atleast 50 percent
- atleast 80 percent
- atleast 90 percent
Correct

Incorrect
Question 7 of 100

7. Question
1 points
In case of open position of any Client exceeding the specified limit , the penalty charged on the clearing member for each day of violation would be
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is lower
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is higher
- 1 percent of the value of the quantity in violation per client or Rs.1,00,000 per client, whichever is lower
- 1 percent of the value of the quantity in violation per client or Rs.5,00,000 per client, whichever is lower
Correct

Incorrect
Question 8 of 100

8. Question
1 points
Margin percentage and lot size is decided by
- Stock Exchanges
- Stock Brokers
- RBI
- SEBI
Correct

Incorrect
Question 9 of 100

9. Question
1 points
An investor is bearish about Tata Motors and sells ten one-month ABC Ltd. futures contracts at Rs.6,06,000. On the last Thursday of the month, Tata Motors closes at Rs.600. He makes a _________. (assume one lot = 100)
- Profit of Rs. 6,000
- Loss of Rs. 6,000
- Profit of Rs. 8,000
- Loss of Rs. 8,000
Correct

Incorrect
Question 10 of 100

10. Question
1 points
The total number of outstanding contracts (long/short) at any point in time is called the ‘Open interest’
- Option
- FALSE
Correct

Incorrect
Question 11 of 100

11. Question
1 points
Mark-to-market margins are collected ___________.
- On a weekly basis
- Every 2 days
- Every 3 days
- On a daily basis
Correct

Incorrect
Question 12 of 100

12. Question
1 points
The operating range applicable in the Index futures is _____
- 5 percent only
- 20 percent only
- 10 percent only
- No operating range is applicable
Correct

Incorrect
Question 13 of 100

13. Question
1 points
The maximum penalty for any member or client who increased the existing positions or created a new position in the security under f/o ban is __________
- Rs.50000
- Rs.10000
- Rs.100000
- Rs.5000
Correct

Incorrect
Question 14 of 100

14. Question
1 points
For equity derivatives, carrying cost is the interest paid to finance the purchase less (minus) dividend earned
- TRUE
- FALSE
Correct

Incorrect
Question 15 of 100

15. Question
1 points
Scrips or portfolios having beta greater than 1 are called aggressive scrips or portfolios respectively.
- TRUE
- FALSE
Correct

Incorrect
Question 16 of 100

16. Question
1 points
Which is the ratio of change in option premium for the unit change in interest rates?
- Gamma
- Rho
- Vega
- Theta
Correct

Incorrect
Question 17 of 100

17. Question
1 points
An investor is long on 1 contract of Nifty futures purchased at Rs. 9035. Nifty Futures closes at Rs. 8855 next day. What is the mark to market for the investor? (1 Nifty contract is 75 shares).
- Rs. -13500
- Rs. 13500
- Rs. -15000
- Rs. 15500
Correct

Incorrect
Question 18 of 100

18. Question
1 points
What could be the maximum profit for a Seller of Options Contract
- Unlimited
- Premium Received
- Depends on the Strike Price
- Depends on the type of the option like CALL or PUT
Correct

Incorrect
Question 19 of 100

19. Question
1 points
Which of the following are derivatives?
- Forex rate
- Interest rate
- Swaption
- All of the above
Correct

Incorrect
Question 20 of 100

20. Question
1 points
Long Straddle is a strategy with __________
- Unlimited Profit & Unlimited Loss
- Limited Profit & Limited Loss
- Unlimited Profit @ Limited Loss
- Limited Profit & Unlimited Loss
Correct

Incorrect
Question 21 of 100

21. Question
1 points
In case of open position of any sub account of FII exceeding the specified limit , the penalty charged on the clearing member for each day of violation would be
- 1 percent of the value of the quantity in violation per client or Rs.5,00,000 per client, whichever is lower
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is higher
- 1 percent of the value of the quantity in violation per client or Rs.1,00,000 per client, whichever is lower
- 1 percent of the total quantity in violation per client or Rs.1,00,000 per client, whichever is lower
Correct

Incorrect
Question 22 of 100

22. Question
1 points
An option which gives the holder the right to sell a stock at a specified price at some time in the future is called a
- Naked option
- Call option
- Out-of-the-money option
- Put option
Correct

Incorrect
Question 23 of 100

23. Question
1 points
What could be the maximum loss for a Seller of Options Contract
- Unlimited
- Premium Paid
- Depends on the Strike Price
- Depends on the type of the option like CALL or PUT
Correct

Incorrect
Question 24 of 100

24. Question
1 points
Diagonal spreads are more suitable for ___________
- Only Spot Markets
- Only Exchange Traded Market
- Only OTC Markets
- Both OTC & Exchange Traded Markets
Correct

Incorrect
Question 25 of 100

25. Question
1 points
Which of the following is traded in exchanges?
- Forward Contract
- Futures Contract
- Weekly Options
- Swaptions
Correct

Incorrect
Question 26 of 100

26. Question
1 points
nvestor A wants to sell 20 contracts of August series at Rs.4500 and Investor B wants to sell 17 contracts of September series at Rs.4550. Lot size is 50 for both these constracts. The Initial Margin is fixed at 6%. How much Initial Margin is required to be collected from both these investors (sum of initial margins of A and B) by the broker?
- 270000
- 232050
- 502050
- 410000
Correct

Incorrect
Question 27 of 100

27. Question
1 points
The theoretical futures price is based on the ________.
- strike price
- underlying spot price
- the price at which a futures contract trades in the market
- the price set by the exchange
Correct

Incorrect
Question 28 of 100

28. Question
1 points
The___________of a portfolio of options is the rate of change of the value of the portfolio with respect to the interest rate.
- Theta
- Beta
- Rho
- Rho
Correct

Incorrect
Question 29 of 100

29. Question
1 points
__________ of the option is the one who receives the option premium and is thereby obliged to sell/buy the asset if the buyer exercises on him.
- Buyer
- Seller
- Both Buyer and Sellers
- None
Correct

Incorrect
Question 30 of 100

30. Question
1 points
Strike price has to be adjusted for stocks for which ___________ is declared.
- Ordinary dividend
- AGM
- Extra ordinary dividend
- None of the above
Correct

Incorrect
Question 31 of 100

31. Question
1 points
A calendar spread becomes a naked or open position, when the near month contract expires or either of the legs of spread is closed
- TRUE
- FALSE
Correct

Incorrect
Question 32 of 100

32. Question
1 points
Which of the following prices is used to compute MTM of a futures contract in case it is not traded on a given day?V
- closing price of the underlying
- closing price of the futures contract
- theoritical price
- MTM is not levied in such cases.
Correct

Incorrect
Question 33 of 100

33. Question
1 points
Client A has purchased 10 contracts of December series and sold 7 contracts of January series of the NSE Nifty futures. How many lots will get categorised as regular (non-spread) open positions?
- 17
- 7
- 3
- 10
Correct

Incorrect
Question 34 of 100

34. Question
1 points
Daily settlement price of futures contracts on expiry day is ______________________
- the closing price of the respective underlying on such day
- the closing price of the respective contracts on such day
- the 6 month average closing price of the respective contracts on such day
- None of the above
Correct

Incorrect
Question 35 of 100

35. Question
1 points
A member has two clients C1 and C2. C1 has purchased 800 contracts and C2 has sold 900 contracts in August XYZ futures series. What is the outstanding liability (open position) of the member towards Clearing Corporation in number of contracts?
- 900
- 100
- 800
- 1700
Correct

Incorrect
Question 36 of 100

36. Question
1 points
Bearish Vertical Spreads can be implemented by the use of _________
- Only Puts
- Only Calls
- Both calls and puts
- None of the above
Correct

Incorrect
Question 37 of 100

37. Question
1 points
Securities Transaction Tax (STT) in case of Sale of an option in securities is _______
- 0.017 percent
- 0.13 percent
- 0.0125 percent
Correct

Incorrect
Question 38 of 100

38. Question
1 points
A Local Jeweler agrees to buy 3 kilograms of gold from whole sale gold trader after 2 months. What type of contract we are reffering here to?
- Futures Contract
- Forward Contract
- Swaptions
- None of the above
Correct

Incorrect
Question 39 of 100

39. Question
1 points
Bullish Vertical Spreads can be implemented by the use of _________
- only futures
- Only Calls
- Only Puts
- Both calls and puts
Correct

Incorrect
Question 40 of 100

40. Question
1 points
A put option gives the buyer a right to sell how much of the underlying to the writer of the option?
- Any quantity
- The specified quantity or less than the specified quantity
- The specified quantity or more than the specified quantity
- Only the specified quantity (lot size of the option contract)
Correct

Incorrect
Question 41 of 100

41. Question
1 points
Nifty consists of securities having _____ market capitalization stocks.
- large
- small
- medium
- large and small
Correct

Incorrect
Question 42 of 100

42. Question
1 points
Ms. Shetty has sold 800 calls on DR. REDDY’S LAB at a strike price of Rs.882 for a pre mium of Rs.25 per call on April 1. The closing price of equity shares of DR. REDDY’S LAB is Rs. 884 on that day. If the call option is assigned against her on that day, what is her net obligation on April 01?
- Pay-out of Rs.18,300
- Pay-in of Rs.18,300
- Pay-in of Rs.13,800
- Pay-out of Rs.18,400
Correct

Incorrect
Question 43 of 100

43. Question
1 points
The F&O segment of NSE provides trading facilities for the following derivative instruments, except
- Individual warrant options
- Index based futures
- Index based options
- Individual stock options
Correct

Incorrect
Question 44 of 100

44. Question
1 points
__________ take advantage of a discrepancy between prices in two different markets
- Speculators
- Hedgers
- Arbitrageurs
Correct

Incorrect
Question 45 of 100

45. Question
1 points
An index put option at a strike of Rs 2176 is selling at a premium of Rs 18 At what index level will it break even for the buyer of the option
- Rs 2162
- Rs 2158
- Rs 2196
- Rs 2194
Correct

Incorrect
Question 46 of 100

46. Question
1 points
Forward contracts are ________ contracts.
- Multilateral
- Tri-lateral
- Future
- Bilateral
Correct

Incorrect
Question 47 of 100

47. Question
1 points
Usually, open interest is maximum in the _______ contract.
- far month
- far month
- near month
- more liquid contracts
Correct

Incorrect
Question 48 of 100

48. Question
1 points
The may futures contract on XYZ ltd. closed at Rs.3940 yesterday. It closes today at Rs.3898.6. The spot closes at Rs.3800. Raju has a short position of 3000 in the may futures contract. he sells 2000 units of may expiriing put options on XYZ with a strike price of Rs.3900 for a premium of Rs.110 per unit. What is his net obligation to/from the clearing corporation today?
- The may futures contract on XYZ ltd. closed at Rs.3940 yesterday. It closes today at Rs.3898.6. The spot closes at Rs.3800. Raju has a short position of 3000 in the may futures contract. he sells 2000 units of may expiriing put options on XYZ with a strike price of Rs.3900 for a premium of Rs.110 per unit. What is his net obligation to/from the clearing corporation today?
- payout of Rs.640000
- payout of Rs.344200
- payin of Rs.95800
Correct

Incorrect
Question 49 of 100

49. Question
1 points
Selling one market lot of calls at a strike of 3800 and Buying a market lot of calls at a strike of 4200 is an example for
- bull spread
- bear spread
- bear spread
Correct

Incorrect
Question 50 of 100

50. Question
1 points
Cash and Carry model for futures pricing is also known as non-arbitrage model
- TRUE
- FALSE
Correct

Incorrect
Question 51 of 100

51. Question
1 points
The first stock index futures contract was traded at _____________
- Chicago Mercantile Exchange
- LIFFE
- NSE
- Kansa City board of Trade
- BSE
Correct

Incorrect
Question 52 of 100

52. Question
1 points
The normal trading is resumed in a scrip banned in derivatives segment if the open interest __________
- falls below 90 percent of the market wide position limit
- falls below 80 percent of the market wide position limit
- falls below or equals 80 percent of the market wide position limit
- falls below or equals 90 percent of the market wide position limit
Correct

Incorrect
Question 53 of 100

53. Question
1 points
Hedge contract month is the maturity month of the contract through which a trader hedges his position
- TRUE
- FALSE
Correct

Incorrect
Question 54 of 100

54. Question
1 points
___________ is the last day on which the futures contract will be traded, at the end of which it will cease to exist
- judgement day
- last friday of the month
- expiry date
- last tuesday of the month
Correct

Incorrect
Question 55 of 100

55. Question
1 points
Clearing corporation on a derivatives exchange becomes a legal counterparty to all trades and be responsible for guaranteeing settlement for all open positions.
- FALSE
- TRUE
Correct

Incorrect
Question 56 of 100

56. Question
1 points
An arbitrage is a deal that produces risk free profits by exploiting a mispricing in the market
- TRUE
- FALSE
Correct

Incorrect
Question 57 of 100

57. Question
1 points
The beta of TELCO is 0.8. A person has a long TELCO position of Rs. 800,000 coupled with a short Nifty position of Rs. 600,000. Which of the following is TRUE?
- He is bearish on Nifty as well as on TELCO
- He is bearish on Nifty as well as on TELCO
- He has a partial hedge against fluctuations of Nifty
- He has a partial hedge against fluctuations of Nifty
Correct

Incorrect
Question 58 of 100

58. Question
1 points
STT for sale of option in Securities
- 0.17%
- 0.04%
- 0.017 %
- None
Correct

Incorrect
Question 59 of 100

59. Question
1 points
To be eligible for trading in derivatives segment, the market wide position limit of the stock should be ________
- >= 300 crores
- >= 300 crores
- <= 100 crores
- >= 500 crores
Correct

Incorrect
Question 60 of 100

60. Question
1 points
Cost of Carry represents the relationship between ___________ and ______________ Prices
- SPOT,Futures
- SPOT.Cash
- SPOT.Cash
- None
Correct

Incorrect
Question 61 of 100

61. Question
1 points
Theta is also referred to as the _________ of the portfolio
- time decay
- time decay
- time decay
- risk delay
Correct

Incorrect
Question 62 of 100

62. Question
1 points
A corporate manager can
- perform order and trade related activities
- receive reports for all branches of the trading member firm
- receive reports for all dealers of the firm.
- can define exposure limits for the branches of the firm
- all the above
Correct

Incorrect
Question 63 of 100

63. Question
1 points
___________ is created when the underlying view on the market is positive but the trader would also like to reduce his cost on position
- A bear spread
- A bull spread
- A rangebound spread
- A rangebound spread
Correct

Incorrect
Question 64 of 100

64. Question
1 points
if we compute the index based on weights of each security based on non promoter holding, it is called ______
- free float market capitalization index
- price weighted
- equal weighted
- market capitalisation index
Correct

Incorrect
Question 65 of 100

65. Question
1 points
A January month Nifty Futures contract will expire on the last _____ of January
- Monday
- Thursday
- Tuesday
- Wednesday
Correct

Incorrect
Question 66 of 100

66. Question
1 points
The order size (in value terms) required to cause a change in the stock price equal to one-quarter of a standard deviation is called as _______
- Beta Order size
- Alpha order size
- Bulk order size
- Median quarter sigma order size
Correct

Incorrect
Question 67 of 100

67. Question
1 points
OTC derivative market is highly regulated market because these transactions occur in private among qualified counterparties
- TRUE
- FALSE
Correct

Incorrect
Question 68 of 100

68. Question
1 points
Institutional investors world wide are major users of ______.
- Stock Futures
- Stock Options
- Index Linked derivatives
- Equity linked derivatives
Correct

Incorrect
Question 69 of 100

69. Question
1 points
The intrinsic value of a call option is
- the amount the option is ITM
- the amount the option is OTM
- the amount the option is ATM
- the amount the option is ATM
Correct

Incorrect
Question 70 of 100

70. Question
1 points
Which is true about IOC – Immediate or Cancel order in future and option segment?
- IOC is not applicable for Futures and Options segment.
- IOC is applicable only for Buy Orders.
- Order released in to the system will search for matching portion. Unmatched portion is cancelled Immediately.
Correct

Incorrect
Question 71 of 100

71. Question
1 points
Arbitragers generally lock in their profits unlike traders who trade naked contracts
- TRUE
- FALSE
Correct

Incorrect
Question 72 of 100

72. Question
1 points
What is the outstanding position on which initial margin will be levied, if no proprietary trading is done and the details of client trading are one client buys 1000 units at the rate 1260 and the second client buys 1000 units at the rate Rs 1255 and sells 1000 units at the rate Rs 1260
- 4000 units
- 3000 units
- 2000 units
- 1000 units
Correct

Incorrect
Question 73 of 100

73. Question
1 points
A defaulting members clients positions could be transferred to ____________ by the Clearing Corporation.
- Error account
- Error account
- Error account
- Another solvent member
Correct

Incorrect
Question 74 of 100

74. Question
1 points
Vertical spread is also known as Calendar spread
- TRUE
- FALSE
Correct

Incorrect
Question 75 of 100

75. Question
1 points
Corporate actions are broadly classified under _____________ and _____________
- stock benefits and cash benefits
- stock options and bonus
- stock options and bonus
- none of the above
Correct

Incorrect
Question 76 of 100

76. Question
1 points
Put option seller will have the obligation to sell if the put option buyer exercises his right.
- TRUE
- FALSE
Correct

Incorrect
Question 77 of 100

77. Question
1 points
SBI is trading at Rs. 1800 in the cash market. What would be the price of SBI futures expiring three months from today. Risk free rate = 8% p.a.
- 1844
- 1895
- 1814
- 1895
Correct

Incorrect
Question 78 of 100

78. Question
1 points
Santhosh is bullish about company XYZ and buys ten one-month XYZ futures contracts at Rs.296,000. On the last thrusday of the month, XYZ closes at Rs.271. he makes a ________________
- profit of Rs.15000
- profit of Rs.25000
- loss of Rs.15000
- loss of Rs.25000
Correct

Incorrect
Question 79 of 100

79. Question
1 points
In the NEAT F&O system, the hierarchy amongst users comprises of _______.
- branch manager, dealer, corporate manager
- corporate manager, branch manager, dealer
- dealer, corporate manager, branch manager
- corporate manager, dealer, branch manager
Correct

Incorrect
Question 80 of 100

80. Question
1 points
Clients positions can not be netted off against each other while calculating initial margin on the derivatives segment.
- TRUE
- FALSE
Correct

Incorrect
Question 81 of 100

81. Question
1 points
The expiration date is the date on which
- the option holder must exercise.
- the option writer's rights expire.
- the option holder's rights expire.
- Both A and C
Correct

Incorrect
Question 82 of 100

82. Question
1 points
On expiry, the settlement price of a stock futures contract is _______.
- opening price of futures contract
- closing stock price
- closing stock price
- opening stock value
Correct

Incorrect
Question 83 of 100

83. Question
1 points
When the strike price is lower than the spot price of the underlying, a call option will be ____.
- At the money
- At the money
- Out of the money
- American Type
Correct

Incorrect
Question 84 of 100

84. Question
1 points
________ wish to bet on future movements in the price of an asset
- Hedgers
- Arbitrageurs
- Speculators
Correct

Incorrect
Question 85 of 100

85. Question
1 points
Hedgers provide the liquidity and the dept to the derivatives market.
- TRUE
- FALSE
Correct

Incorrect
Question 86 of 100

86. Question
1 points
Horizontal spread is also known as Time Spread
- FALSE
- TRUE
Correct

Incorrect
Question 87 of 100

87. Question
1 points
If you have sold a XYZ futures contract (contract multiplier 50) at 3100 and bought it back at 3300, what is your gain/loss?
- A gain of Rs. 5000
- A loss of Rs. 10000
- A loss of Rs. 5000
- A gain of Rs. 10000
Correct

Incorrect
Question 88 of 100

88. Question
1 points
Which of the following is required for personnel working in the industry in order to dispense quality intermediation?
- To follow certain code of conduct.
- To give frequent buy and sell recommendations to clients.
- To have good contacts with institutional clients.
- All of the above
Correct

Incorrect
Question 89 of 100

89. Question
1 points
In a Stop Loss Buy Order, Limit Price is
- Less than Trigger Price
- Less than or Equal to Trigger Price
- Greater than Trigger Price
- Greater than or Equal to Trigger Price
Correct

Incorrect
Question 90 of 100

90. Question
1 points
________ involves combining options on the same underlying and of same type (call/ put) but with different strikes and maturities
- warrants
- swaps
- Spreads
- SPN
Correct

Incorrect
Question 91 of 100

91. Question
1 points
Option seller will be legally bound to honour the contract by settling in cash if the option buyer does not exercise.
- TRUE
- FALSE
Correct

Incorrect
Question 92 of 100

92. Question
1 points
Which of the following cant be a underlying asset for a FINANCIAL derivative contract?
- Equity index
- commodities
- interest rate
- foreign exchange
Correct

Incorrect
Question 93 of 100

93. Question
1 points
________ uses futures or options market to reduce or eliminate risk
- Arbitrageurs
- Hedgers
- Speculators
Correct

Incorrect
Question 94 of 100

94. Question
1 points
American options can be exercised any time during the contract cycle.
- FALSE
- TRUE
Correct

Incorrect
Question 95 of 100

95. Question
1 points
All futures contracts for each member are ________________ to the daily settlement price of the contract.
- marked
- marked to market
- settled
- None of the above
Correct

Incorrect
Question 96 of 100

96. Question
1 points
Capacity of derivatives market to absorb buying/selling by hedgers is directly dependent upon availability of traders, who act as counter-party to hedgers
- TRUE
- FALSE
Correct

Incorrect
Question 97 of 100

97. Question
1 points
Derivatives help in ____.
- Risk Management
- Price Discovery of the underlying
- Improving Market Efficiency
- All of the above
Correct

Incorrect
Question 98 of 100

98. Question
1 points
Which of the following is the duty of the trading member?
- Employing large numbers of research analysts
- Executing his own orders prior to client orders
- Bringing risk factors to the knowledge of client
- None of the above