Sample Questions

NISM-Series-8: Equity Derivatives Mock Tests — 5 random MCQs with answers & explanations

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These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 Short Strangle strategy offers:

A. Higher profit probability but unlimited risk Correct Answer
B. No premium collection
C. Guaranteed zero risk
D. Limited loss and unlimited profit

Explanation:

Out-of-the-money strikes give a wider profit zone, but large market movements still cause unlimited downside.

Marks: 1

Q2 If Nifty index rises 1%, a stock with Beta 1.5 is expected to rise:

A. 0.5%
B. 3.0%
C. 1.5% Correct Answer
D. 1.0%

Explanation:

Expected Stock Return = Beta × Index Return = 1.5 × 1% = 1.5%.

Marks: 1

Q3 Daily volatility of stock is 2%. What is the approximate annualized volatility assuming 252 trading days?

A. 16.00%
B. 31.75% Correct Answer
C. 25.20%
D. 50.40%

Explanation:

Annualized Volatility = Daily Volatility × √(252) = 2% × 15.8745 = 31.75%.

Marks: 1

Q4 Which exchange was established in 1973 as the first marketplace specifically for trading listed options?

A. Chicago Board of Trade (CBOT)
B. Chicago Mercantile Exchange (CME)
C. Chicago Board Options Exchange (CBOE) Correct Answer
D. New York Stock Exchange (NYSE)

Explanation:

The Chicago Board Options Exchange (CBOE) became the first marketplace designed for trading listed options in 1973.

Marks: 1

Q5 _________ is allotted on client onboarding and serves as an exclusive identification of the client.(NISM workbook)

A. ISIN code
B. PAN number
C. Unique client code Correct Answer
D. Demat account number

Explanation:

A Unique Client Code (UCC) is assigned to every client at onboarding. It exclusively identifies the client across all transactions on the exchange.

Marks: 1

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