NISM 3 Equity Derivatives Certification Exam

A long position in a call option can be closed out by taking a long position in a put option with identical exercise date and exercise price - State True or False ?

• TRUE

• FALSE

Intrinsic value is always positive for in-the-money options and zero for out-of-the money options - State True or False ?

• TRUE

• FALSE

For a derivative exchange, the networth requirement for a clearing member is always less than that for a non clearing member - State True or False ?

• TRUE

• FALSE

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

• TRUE

• FALSE

If futures price is higher than spot price of an underlying asset, this is known as .

• Maximization

• Normalization

• Backwardation

• Contango

What is the beta of a portfolio ?

• Its the value weighted average of the beta’s of the constituent securities in that portfolio

• Its the same as the beta of the stock with the highest market capitalization

• Its the sum of the betas the constituent securities in that portfolio

• Its the simple average of the beta’s of the constituent securities in that portfolio

In a derivative segment, the initial margin is collected from the clearing member on a net basis ie. after netting all buy and sell positions of all clients together - State True or False ?

• TRUE

• FALSE

What happens to the unmatched portion of the order in an Immediate or cancel (IOC) order ?

• It will be added to the order book as a limit order

• It will be executed on the next trading day

• It will be executed in the next one hour

• It will be cancelled

A feature of a forward contract is .

• Its traded one-to-one between counterparties

• It has good liquidity

• It cannot be of a tenor of more than one year

• It does not carry any credit risk

can write an option in the Indian stock market .

• Common individuals

• Market makers

• Foreign Financial Institutions (FII)

• All of the above