EQUITY DERIVATIVES QUESTION BANK

FOR
NISM EXAMINATION
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1. All Stock Options are American in nature.
a. FALSE
b. TRUE
c. I am not attempting this question
d.
e.
ANSWER :a
2. An European Option
a. can be exercised anytime during the life of the Option
b. can be exercised only at maturity
c. is traded only on the European Exchange
d. is a floating rate option
e. I am not attempting this question
ANSWER :b
3. An investor bought a put option on a stock with a strike price Rs. 2000 for Rs. 200. The option will
be in the money when _______.
a. The stock price is greater than Rs. 2200
b. The stock price is less than Rs. 2000
c. The stock price is less than Rs. 1800
d. The stock price is greater than Rs. 2000
e. I am not attempting this question
ANSWER :b
4. An investor buys 2 contracts of TCS futures for Rs. 570 each. He sells of one contract at Rs. 585. TCS
futures closes the day at Rs. 550. What is the net payment the investor has to pay/ receive from his
broker? 1 TCS contract = 1000 shares
a. Receive Rs. 15000 from the broker
b. Pay Rs. 5000 to the broker
c. Receive Rs. 5000 from the broker
d. Pay Rs. 20000 to the broker
e. I am not attempting this question
ANSWER :d

6. An investor buys a 1 lot of Nifty futures at Rs. 4927 and sells it at Rs. 4567 If one contract is 50
shares what is the Profit/ Loss in the transaction?
a. Profit Rs. 22000
b. Loss Rs. 22000
c. Loss Rs. 18000
d. Profit Rs. 18000
e. I am not attempting this question
ANSWER :d
7. As more and more ____ trades take place, the difference between spot and futures prices would
narrow.
a. arbitrage
b. delta
c. speculative
d. hedge
e. I am not attempting this question
ANSWER :a
8. At any time , the F&O segment of nse provides trading facilities for..... NIFTY futures contracts.
a. two
b. three
c. nine
d. none of the above
e. I am not attempting this question
ANSWER :b
9. At the end of each trading day, the Clearing House process of settling your account on a cash
basis(funds added to your balance if your position has made a profit, deducted if you sustained a loss)
is called:
a. Initial performance bond call.
b. Performance bond call.
c. Maintenance performance bond call.
d. Marking to the market.
e. I am not attempting this question
ANSWER :d
10. Computational methodology followed for construction of stock market indices are
a. Free Float Market Capitalization weighted Index
b. Market Capitalization weighted index
c. Price Weighted Index.
d. True all of them
e. I am not attempting this question

ANSWER :d

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