Professional Documents
Culture Documents
Exam
Exam
Exam
Debt instrument
Derivative product
2. The purchase of a share in one market and the simultaneous sale in a different
market to benefit from price differentials is known as ____________.
Mortgage
Arbitrage
Hedging
Speculation
Speculation
Hedging
Arbitraging
Government policies
True
False
6. 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?
16,600
15,600
-15,600
-16,600
7. 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.)
8. Which of the following is closest to the forward price of a share, if Cash Price =
Rs.750, Forward Contract Maturity = 6 months from date, Market Interest rate =
12%?
772.5
795
840
940.8
9. If you have sold a XYZ futures contract (contract multiplier 50) at 3100 and
bought it back at 3300, what is your gain/loss?
11. Client A has purchased 10 contracts of December series and sold 7 contracts of
January series of the NSE Nifty futures. How many lots will get categorized as
regular (non-spread) open positions?
10
7
3
17
12. In an equity scheme, fund can hedge its equity exposure by selling stock index
futures.
True
False
True
False
Seller has more than a year's time to deliver the stock which he sold
16. The buyer of an option cannot lose more than the option premium paid.
19. You sold a Put option on a share. The strike price of the put was Rs.245 and
you received a premium of Rs.49 from the option buyer. Theoretically, what can be
the maximum loss on this position?
196
206
0
49
20. Current Price of XYZ Stock is Rs. 286. Rs. 260 strike call is quoted at Rs. 45.
What is the Intrinsic Value?
19
26
45
0
21. A european call option gives the buyer the right but not the obligation to buy
from the seller an underlying at the prevailing market price "on or before" the expiry
date.
True
False
22. A put option gives the buyer a right to sell how much of the underlying to the
writer of the option?
Any quantity
24. 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?
Rs 1
Rs 2
Rs 4
Standardised options
Customised options
26. Higher the price volatility of the underlying stock of the put option,
______________.
27. In which option is the strike price better than the market price (i.e., price
difference is advantageous to the option holder) and therefore it is profitable to
exercise the option?
Out-of the money option
At-the-money option
Higher-the-money option
28. Mr. X purchases 100 put option on stock S at Rs. 30 per call with strike price of
Rs. 280. If on exercise date, stock price is Rs. 350, ignoring transaction cost, Mr. X
will choose _____________.
May or may not exercise the option depending on whether he is in his hometown or not at that time
May or may not exercise the option depending on whether he like the company S or not
29. Three Call series of XYZ stock - January, February and March are quoted.
Which will have the lowest Option Premium (same strikes)?
January
February
March
30. Which is the ratio of change in option premium for the unit change in interest
rates?
Vega
Rho
Theta
Gamma
31. 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?
285
40
0
205
32. 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 ___________.
Bullish spread
Bearish spread
Butterfly spread
Calendar spread
33. On the derivative exchanges, all the orders entered on the Trading System are
at prices exclusive of brokerage.
True
False
34. A trader has bought 100 shares of XYZ at Rs.780 per share. He expects the
price to go up up but wants to protect himself if the price falls. He does not want to
lose more than Rs.1000 on this long position in XYZ. What should the trader do?
Place a limit sell order for 100 shares of XYZ at Rs.770 per share
Place a stop loss sell order for 100 shares of XYZ at Rs.770 per share
Place a limit buy order for 100 shares of XYZ at Rs.790 per share
Place a limit buy order for 100 shares of XYZ at Rs.770 per share
35. Investor A wants to sell 20 contracts of August series at Rs.4500 and Investor B
wants to sell 17 contracts of September series at Rs.4550. Lot size is 50 for both
these constracts. The Initial Margin is fixed at 6%. How much Initial Margin is
required to be collected from both these investors (sum of initial margins of A and B)
by the broker?
2,70,000
5,02,050
2,32,050
4,10,000
36. 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?
800
1700
900
100
The Exchange
A suspense account
Error account
38. Clients' positions cannot be netted off against each other while calculating initial
margin on the derivatives segment.
True
False
On a weekly basis
Every 2 days
Every 3 days
On a daily basis
Networth of an investor
True
False
RBI
Clearing Corporation
SEBI
Margin Office
44. Liquid Assets maintained by Mr A (Clearing Member) are higher than that
maintained by Mr B (Clearing Member). Which of the following statements is true?
45. On the Clearing Council of the Clearing Corporation of the derivatives segment,
broker-members are allowed.
True
False
46. The main objective of Trade Guarantee Fund (TGF) at the exchanges is
_________________.
Expected maximum loss, which may be incurred by a portfolio over a given period of time and specified
confidence level
Only members, who are registered with the Derivatives Segment as Clearing Members
49. If price of a futures contract decreases, the margin account of the buyer of this
futures contract is debited for the loss.
True
False
50. 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 objectives.
True
False