NISM Series VIII – Equity Derivatives Paper – 01

Q1.If a company declares a dividend, what will be the effect on the pricing of call options?
 Call option price will rise
 Call option price will fall
 No effect on option pricing
 None of the above

 

Q2.In an In the money PUT option_
 strike price would be lower than the market price
 exercise price would be equal to the market price
 strike price would be higher than the market price
 strike price would be zero

 

Q3.The Ask price is always greater than the Bid price.
  False
  True

 

Q4.An index option is a Money Market Instrument – True or False?
  True
  False

 

Q5.Forward contracts are OTC contracts – True or False?
  True
  False

 

Q 6. Can a Clearing Member give ‘Fixed Deposits’ as part of liquid assets to the Clearing Corporation?
 Yes
 No

 

Q7.When the price of a futures contract increases, the margin account ___.
of the buyer of the futures contract will be credited for the gain
of the seller of the futures contract will be debited for the loss
 Both 1 and 2
 None of the above

 

Q8.Do institutional investors pay lower margins than the individual investors for derivatives trading – State True or False?
  True
  False

 

Q9.The option premium paid by the option buyer remains with the exchange till the time it is closed out or expired.
  True
  False

 

Q10.Beta is a measure of systematic risk of a security that cannot be avoided through diversification.
  True
  False

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