NISM Series VIII – Equity Derivatives Paper – 10

Q1.There is only CASH settlement for Nifty futures contract – State True or False?
  True
  False

 

Q2.A Mutual Fund floats a new fund offer of a 100% equity scheme. Till the time it invests this cash inequity, the fund can take equity exposure by buying stock index futures – State True or False?
  True
  False

 

Q 3.A writer of a naked PUT option is ____.
 Bullish and pays the premium
 Bullish and receives the premium
 Bearish and pays the premium
 Bearish and receives the premium

 

Q 4.The potential exposure is calculated by the clearing corporation ___.
 on the last trading day of the contract month
 on the last trading day of the week
 at the end of the trading day
on real-time basis

 

Q5.If a Trading member defaults in the derivative segment, he can still continue the trading business in the cash segment. – True or False?
  False
  True

 

Q6.The Spot price ie. the market price of a share is Rs 200 and the interest rate is 12% pa. Which of the below price is closest to 3 months’ future maturity?
 206
 200
 203
 224

 

Q7.Mr. Manoj buys a put option on QPR stock for Rs 20 of strike price Rs 130. If on the exercise day, the spot price of QPR is Rs 175, Mr. Manoj will choose ____.
 Not to exercise the option
 To exercise the option
Mayor may not exercise the option depending on whether he is in his city or not at that time
Mayor may not exercise the option depending on whether he likes the company or not

 

Q 8. A long position in the futures market can be reversed only with the same counterparty from whom the contract was initially purchased – State whether True or False?
  True
  False

 

Q 9.If you have sold an ITC Ltd. futures contract (contract multiplier 500) at 200 and bought it back at 228, what is your gain/loss?
 A gain of RS. 6,800
 A loss of Rs. 6,800
 A loss of Rs. 14,000
 A gain of Rs. 14,000

 

Q10.If the price of a stock is volatile, then the option premium would be relatively ___.
 Lower
 Higher
 No effect of volatility
 zero

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