NISM Series VIII – Equity Derivatives Paper – 06

Q1.A stockbroker has two clients P and Q. P has purchased 200 contracts and Q has sold 300 contracts in the May Tata Steel futures series. What is the outstanding liability (open Position) of the member towards Clearing Corporation in the number of contracts?
 100
 200
 300
 500

 

Q2.What does selling short a stock means?
 Seller owns the stock he is supposed to deliver
The seller has sufficient time to deliver the stock which he sold
 Seller does not own the stock he is supposed to deliver
The seller has to deliver the stock within a short time

 

Q3.___ is a deal that produces profit by exploiting a price difference in a product in two different markets.
 Hedging
 Trading
 Speculation
 Arbitrage

 

Q4.A person sells a put option of Strike Price 265, market lot 1000, at a premium of Rs 40, the maximum profit he can make is __.
 Rs 25,000
 Rs 2,65,000
 Rs 40,000
 Unlimited

 

Q5.Main objectives of the Trade Guarantee Fund (TGF) are :
 To protect the interest of the investors in securities.
 To inculcate confidence in the minds of market participants.
 To guarantee settlement of bonafide transactions of the members of the exchange.
 All of the above

 

Q6.Derivative markets mostly comprise of –
 Long term investors
 Speculators
 Hedgers
 Both 2 & 3

 

Q7.Beta is a measure of systematic risk of a security that cannot be avoided through diversification.
  True
  False

 

Q8.Mr. Sam is an equity fund manager and he is bearish on the stock market. How will he use this view to create a hedge?
 He will sell all his stocks
 He will decrease the NAV of his fund
 He will sell index futures
 He will buy index futures

 

Q9.___ is the ratio of change in option premium for a unit change in volatility.
 Rho
 Theta
 Delta
 Vega

 

Q10.Value-at-risk calculations are done on the basis of ____.
 best possible market conditions
 ideal market conditions
 volatility
 90 % risk parameter

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