NISM Series 8 Equity Derivatives Free Mock Test

1. When establishing a relationship with a new client, the trading member takes reasonable steps to assess the background, genuineness, beneficial identify, financial soundness of such person and his investment/trading objectives.

2. You have taken a short position of one contract in June XYZ futures (contract multiplier 50) at a price of Rs. 3,400. When you closed this position after a few days, you realized that you made a profit of Rs. 10,000. Which of the following closing actions would have enabled you to generate this profit? (You may ignore brokerage costs.)

3. A defaulting member's clients’ positions could be transferred to ____________ by the Clearing Corporation.

4. A trader sells a lower strike price CALL option and buys a higher strike price CALL option, both of the same scrip and same expiry date. This strategy is called _______

5. A trader Mr. Raj wants to sell 10 contracts of June series at Rs.5200 and a trader Mr. Rahul wants to buy 5 contracts of July series at Rs. 5250. Lot size is 50 for both these contracts. The Initial Margin is fixed at 10%. They both have their accounts with the same broker. How much Initial Margin is required to be collected from both these investors by the broker?

6. If you sell a put option with strike of Rs 245 at a premium of Rs.40, how much is the maximum gain that you may have on expiry of this position?

7. Put-call parity refers to the relationship between: ________.

8. Cost of carry model states that ______________.

9. If an investor buys a call option with lower strike price and sells another call option with higher strike price, both on the same underlying share and same expiration date, the strategy is called ___________.

10. An option with a delta of 0.5 will increase in value approximately by how much, if the underlying share price increases by Rs 2?

11. Which is the ratio of change in option premium for the unit change in interest rates?

12. The intrinsic value is the difference between Market Price and Strike Price of the option and it can never be negative.

13. Fixed deposits and Bank guarantees are NOT permitted to be offered by Clearing Members to the Clearing corpn as part of liquid assets - State whether True or False?

14. If you have sold a XYZ futures contract (contract multiplier 50) at 3100 and bought it back at 3300, what is your gain/loss?

15. The margining system for index futures is based on _______

16. Who is eligible for clearing trades in index options?

17. Mr A buys an August futures contract of ICICI Bank at Rs 500. On the last Thursday of the month i.e., expiry, the last traded price in August futures is Rs 512 and the closing price in cash / spot market is Rs 510. What is the profit / loss of Mr if his position is sq-up by the exchange? Market lot of ICICI Bank is 250.

18. A member has two clients C1 and C2. C1 has purchased 800 contracts and C2 has sold 900 contracts in August XYZ futures series. What is the outstanding liability (open position) of the member towards Clearing Corporation in number of contracts?

19. When you buy a put option on a stock you are owning, this strategy is called ________

20. _______ is a deal that produces profit by exploiting a price difference in a product in two different markets.

21. Initial margin collection is monitored by the _________.

22. You sold one XYZ Stock Futures contract at Rs. 278 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265?

23. Which of the following measures was introduced by SEBI to prevent brokers from allowing excessive intraday leverage to their clients?

24. The type of volatility which is derived from the option price and indicates the volatility expected over the life of the option is termed as ____________.

25. A calendar spread contract in index futures attracts ___________.