NISM Series VIII – Equity Derivatives Paper – 25

Q1.Does the difference between the exercise price of the option and spot price affect option premium? State Yes or No.


Q2.An equity index option like NIFTY OPTION is a_____.
 Treasury instrument
 Debt instrument
 Derivative Product
 Cash market product


Q3.In an Index Futures contract, the tick size is 0.2 of an index point & the index multiple is Rs 50, then ‘a tick’ is valued at____.
 Rs 50
 Rs 100
 Rs 10
 Rs 2.50


Q4.Initial margin is calculated based on _
 Average price movement in the last 5 working days
 Value-At-Risk (VAR) based margining.
 fixed at 25% for most of the scrips and 35% for volatile scrips
As per The Black & Scholes Model


Q 5. A trader buys a January ABC stock futures contract at Rs 768 and the lot size is 1200. What is his profit or loss, if he squares off the position at Rs 778?
 Rs. 12000
 Rs 1200000
 – Rs 12000
 – Rs 10000


Q6.OTC derivative market is a less regulated market because these transactions occur in private among qualified counterparties, who are supposed to be capable enough to take care of themselves. True or False


Q7.Does trading in derivatives become expensive due to high margins? State Yes or No.


Q8.The net worth of a trading member does not include –
 Intangible Assets
 Prepaid expenses
 Bad Deliveries
 All of the above


Q9.In an Out-of-the-Money (OTM) Put option _
The strike price would be higher than the market price
 Exercise price would be equal to the market
The strike price would be lower than the market price
 strike price would be zero


Q10.Which of these complaints against a trading member can an Exchange take up for redressal?
 Claims for expenses incurred for taking up the matter with the ISC
Losses for transactions which are not within the framework of exchange
 Claims for opportunity loss for the particular disputed trade
 Excess brokerage charged by a broker

Click Here for Answer Key