PRACTICE QUESTIONS-1 – 50 Ques

In case there is a Stock Split of a company which is a part of an Index, what will its impact be on the index value?

On final settlement, the buyer/holder of the option will recognize the favorable difference received from the seller/writer as ______ in the profit and loss account.

Higher the strike price, the premium on call option will decrease – True or False?

Trading is allowed in Indian equity markets in which of the following?

Can the exercise price be more than or equal to or less than the cash spot price?

Can one sell assets in futures market even if he does not own any such assets?

On the derivatives futures market, if there are three series of one, two and three months open at a

All the 50 stocks of NSE Nifty index are equally weighed while calculating the index – State True or False?

What does a Call Option give the buyer?

Speculators are those who take risk whereas hedgers are those who wish to reduce risk – State True or False?

The money and securities which are deposited in a client’s account.

A short position in a PUT option can be closed out by taking a long position in the same PUT option – True or False?

Time Decay’ is beneficial to the.

Identify the TRUE statement with respect to a Put option.

Mr. Menon has bought a futures contract and the price rises. In this case, Mr. Menon will

How is the forward contract, which is for hedging purpose, accounted for in books of accounts?

A Derivative market helps in transferring the risk from.

Which of these options is an example of a Calendar Spread?

Ms. Kavita wants to ‘Sell’ on a futures market. For this, she .

The Derivatives market helps in.

Identify the FALSE statement with respect to Options.

Mr. Ashu has bought 100 shares of ABC at Rs 980 per share and doesn’t want to lose more than Rs 1000. What should he do?

Initial margin to be paid in derivatives is set up taking into account the volatility of the underlying market. Generally ___

______ is the ratio of change in option premium for a unit change in volatility.

In a derivatives exchange, the networth requirement for a clearing member is higher than that of a non-clearing member – State whether True or False?

The risk that cannot be controlled by diversification of portfolio is _____ .

Can a long position in a Put option be closed out by taking a short position in a call option with identical exercise date and exercise price?

After the initiation of the futures contract, the price of the underlying asset has risen. In this situation, ______ .

There are many products in the market which give high returns in a risk-free manner – True or False?

What will be the Delta for a Far Out-of-the-money option?

The term mark-to-market means ________.

The margining system for index futures is based on _______ .

To whom is a high impact cost beneficial?

A call option gives the buyer the right to buy the underlying at market price – True or False?

A trader buys a Jan ABC futures contract at Rs 768 (lot size 1200) and squares off at Rs 778. What is the profit/loss?

A Professional Clearing Member of the derivatives segment ____________ .

Theta is a measure of the sensitivity of an option price to changes in market volatility – True or False?

Which of these complaints against a trading member can an Exchange redress?

In India, the clearing and settlement of derivatives trades is done through:

Delta is the change in option price given a one percentage point change in the risk-free interest rate – True or False?

Can a Clearing Member give ‘Fixed Deposits’ as part of liquid assets to the Clearing Corporation?

Vega measures change in delta with respect to change in price of the underlying asset – True or False?