NISM Series VIII – Equity Derivatives Paper – 19

Q1.A writer/seller of a deep out of the money CALL option is __.
 Bullish – receiver of premium
 Bullish – payer of premium
 Bearish- receiver of premium
 Bearish – payer of premium

 

Q2.The Risk-Return profile for a Future contract is symmetric while that of an Option contract is asymmetric – State True or False?
  True
  False

 

Q 3.A portfolio with 200 stocks is only half as risky as another portfolio with 100 stocks – State True or False?
  True
  False

 

Q 4.Mr. A is a risk-averse investor. He would prefer secure investments like fixed deposits and other debt instruments and not market-oriented investments – State True or False?
  True
  False

 

Q5.One can use Index Futures for hedging to eliminate or reduce the __.
 Unsystematic Risk
 Systematic Risk
Sector-specific Risk
 Operational Risk

 

Q6._____ is not an application of indices.
 Venture capital funds
 Index Funds
 Index Derivatives
Exchange-Traded Funds

 

Q7.It’s common to have a derivatives contract without any expiration date – State whether True or False?
  True
  False

 

Q8.The strategy in which a trader buys a call option of lower strike price and sells another call option with a higher strike price of the same share and same expiry date is called _____.
 Butterfly spread
 Bearish spread
 Calendar spread
 Bullish spread

 

Q9.In an equity scheme, the Mutual Fund can hedge its equity exposure by selling stock index futures – True or False?
  True
  False

 

Q10.Who monitors the collection of Initial margin and allows exposure to members based on that?
 The Stock Exchange
 The Clearing Corporation
 NSDL or CDSL
 SEBI

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