PRACTICE QUESTIONS- 6 – 50 Ques

Functions of a Derivative Market include

The volatility estimation methodology is known only to the Clearing Corporation and not to others – State True or False?

Foreign Exchange can be a part of liquid assets to be maintained by Clearing Members with the clearing corporation – State True or False?

In case of forward contracts, the rules regarding the minimum amount by which the price would change and the price limits are specified by an authority – State True or False?

_____ can write an option in the Indian stock market.

A person who provides two-way quotes for various stocks is known as

Institutional investors pay lower margins than the individual investors for derivatives trading – State True or False?

A person sells one ABC Ltd. stock futures contract at Rs.268 and the lot size is 1,500. What is the profit (+) or loss (-), if he/she purchases the contract back at Rs.274?

Trade Guarantee Fund (TGF) is maintained for:

If the clearing/trading member fails to pay the dues, the clearing corporation can disable them from trading – State True or False.

Put-call parity refers to the relationship between:

Mr. Sunil places a stop loss sell order on ABC stock with a trigger price of Rs. 450. The current market price is Rs. 470. The order will be released for execution

A fall in the price of Wipro stock will increase the value of the Wipro call option – State True or False.

At which price can a trader place a bid or offer for a scrip?

When a call option on an index is exercised, the option holder will receive from the option writer, cash amount equal to excess of spot price over the strike price – State True or False.

The expiry day for June series Index Futures on NSE would be

Mr. Sam is an equity fund manager and he is bearish on the stock market. How will he use this view to create a hedge?

Scarcity of underlying commodity will generally cause a rise in its futures price – State True or False.

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?

The rate of change in option premium for a unit change in price of the underlying asset is known as Delta – State True or False.

As per the SEBI Act, the board members of Securities Exchange Board of India are appointed by

An Index Option is________.

Future contracts are not symmetrical with respect to rights & obligations of the parties involved – State True or False.

Professional clearing member clears the trades of his associate Trading Member only – State True or False.

When the margins are kept on the lower side, it will attract more players to join the derivatives market – State True or False.

Can an equity-oriented mutual fund hedge its equity exposure by selling index futures?

The Exercise price of an option is same as its position limit – State whether True or False.

Before you take a position in a futures contract, the Exchange calls for _____ to cover any loss that your position may incur.

If the price of far month futures is less than the price of near month futures, it is called as

A trader takes a short position in call option, but does not take any offsetting position in the underlying stock. What is this strategy known as?

The option which gives the holder a right to SELL the underlying asset on or before a particular date for a certain price is called as________

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