NISM Series VIII – Equity Derivatives Paper – 05

Q1.A Professional Clearing member of derivatives segment ___.
 should also be a member of the cash segment
 should also become a member of the cash segment within 2 years
 provides trading facility to its clients
 does not have any trading rights

 

Q2.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

 

Q3.Theta is a measure of the sensitivity of an option price to changes in market volatility. – State True or False?
  True
  False

 

Q4.When the strike price increases, the premium on call option decreases – State True or False?
  True
  False

 

Q5.You sold one ABC stock futures contract at Rs.268 and the lot size is 1,500. What is your profit (+) or loss (-), if you purchase the contract back at Rs.274?
 9000
 18000
 -9000
 -18000

 

Q6.The Intrinsic Value is zero for out-of-the-money options but always positive for in-the-money options – State True or False?
  True
  False

 

Q7.A stock index like Nifty ___.
 is a basket of stocks
 can be easily manipulated
 Both 1 and 2
 None of the above

 

Q8.When a call option on an index is exercised, the option holder will receive from the option writer, a cash amount equal to the excess of spot price (at the time of exercise) over the strike price of the call option – State True or False?
  True
  False

 

Q9.There is higher flexibility in fixing forward contract specifications as compared to futures contract specifications – State True or False?
  True
  False

 

Q10.Delivery-based settlement in single stock futures is provided by __.
 BSE
 NSE
OTHER
 Both BSE and NSE

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