Nism Series Viii

NISM Series VIII: Equity Derivatives Certification Examination 1. An index option is a __________________. __________________. Debt instrument Derivative product [Correct answer NOT selected] Cash market Cash market  product Money market instrument . !he purchase o" a share in one market and the simultaneous sale in a di""erent market to  bene"it "rom price di""erentials is known as ____________. ____________. Mort#a#e Arbitra#e [Correct answer NOT selected] $ed#in# %peculation &. 'inancial &. 'inancial  derivatives provide the "acility "or __________. %peculation $ed#in# Arbitra#in# All o" the above above [Correct answer NOT selected] (. )perational risks include losses due to ____________. *nade+uate disaster plannin# plannin# [Correct answer NOT selected] !oo !oo much o" mana#ement control *ncome tax re#ulations ,overnment policies -. *mpact cost is low when the li+uidity in the system is poor. !rue 'alse [Correct answer NOT selected] . /ou sold one 0/ %tock  'utures  'utures contract  at 2s. 34 and the lot si5e is 1677. 8hat is your pro"it 9:; or loss 9une 0/ "utures 9contract multiplier -7; at a price o" 2s. &6(77. 8hen you closed this position a"ter a "ew days6 you reali5ed that

you made a pro"it o" 2s. 176777. 8hich o" the "ollowin# closin# actions would have enabled you to #enerate this pro"it= 9/ou may i#nore brokera#e costs.; %ellin# 1 >une 0/ "utures contract  at &77 ?uyin# 1 >une 0/ "utures contract  at &77 ?uyin# 1 >une 0/ "utures contract at &77 [Correct answer NOT selected] %ellin# 1 >une 0/ "utures contract  at &77 4. 8hich o" the "ollowin# is closest to the "orward price o" a share6 i" Cash @rice  2s.3-76 'orward Contract Maturity   months "rom date6 Market *nterest rate  1B= 33.3- [Correct answer NOT selected] 4(7 (7.4 . *" you have sold a 0/ "utures contract  9contract multiplier -7; at &177 and bou#ht it  back at &&776 what is your #ainloss= A loss o" 2s. 176777 [Correct answer NOT selected] A #ain o" 2s. 176777 A loss o" 2s. -6777 A #ain o" 2s. -6777 17. A calendar spread contract in index "utures attracts ___________. %ame mar#in as sum o" two independent le#s o" "utures contract Eower mar#in than sum o" two independent le#s o" "utures contract [Correct answer NOT selected] $i#her mar#in than sum o" two independent le#s o" "utures contract  Fo mar#in need to be paid "or calendar spread positions 11. Client A has purchased 17 contracts o" December series and sold 3 contracts o" >anuary series o" the F%G Fi"ty "utures. $ow many lots will #et cate#ori5ed as re#ular 9nonanuary [Correct answer NOT selected] 'ebruary March All will be e+ual &7. 8hich is the ratio o" chan#e in option premium "or the unit chan#e in interest rates= Ie#a 2ho [Correct answer NOT selected] !heta ,amma &1. *" you sell a put option with strike o" 2s. (- at a premium o" 2s.(76 how much is the maximum #ain that you may have on expiry o" this position= 4(7 [Correct answer NOT selected] 7 7&. *" an investor buys a call option with lower strike price and sells another call option with hi#her strike price6 both on the same underlyin# share and same expiration date6 the strate#y is called ___________. ?ullish spread [Correct answer NOT selected] ?earish spread ?utter"ly spread Calendar spread &&. )n the derivative exchan#es6 all the orders entered on the !radin# %ystem are at prices exclusive o" brokera#e. !rue [Correct answer NOT selected] 'alse

&(. A trader has bou#ht 177 shares o" 0/ at 2s.347 per share. $e expects the price to #o up up but wants to protect himsel" i" the price "alls. $e does not want to lose more than 2s.1777 on this lon# position in 0/. 8hat should the trader do= @lace a limit sell order "or 177 shares o" 0/ at 2s.337 per share @lace a stop loss sell order "or 177 shares o" 0/ at 2s.337 per share [Correct answer NOT selected] @lace a limit buy order "or 177 shares o" 0/ at 2s.37 per share @lace a limit buy order "or 177 shares o" 0/ at 2s.337 per share &-. *nvestor A wants to sell 7 contracts o" Au#ust series at 2s.(-77 and *nvestor ? wants to sell 13 contracts o" %eptember series at 2s.(--7. Eot si5e is -7 "or both these constracts. !he *nitial Mar#in is "ixed at B. $ow much *nitial Mar#in is re+uired to be collected "rom both these investors 9sum o" initial mar#ins o" A and ?; by the broker= 6376777 -6767-7 [Correct answer NOT selected] 6&67-7 (6176777 &. A member has two clients C1 and C. C1 has purchased 477 contracts and C has sold 77 contracts in Au#ust 0/ "utures series. 8hat is the outstandin# liability 9open position; o" the member towards Clearin# Corporation in number o" contracts= 477 1377 [Correct answer NOT selected] 77 177 &3. A de"aultin# memberHs clients positions could be trans"erred to ____________ by the Clearin# Corporation. Another solvent member [Correct answer NOT selected] !he Gxchan#e A suspense account Grror account &4. ClientsH positions cannot be netted o"" a#ainst each other while calculatin# initial mar#in on the derivatives se#ment. !rue [Correct answer NOT selected] 'alse &. Mark