Test Your NISM-Series-4: Interest Rates Derivatives Mock Tests Knowledge in 5 Minutes

1. Which of the following is an asset class within the underlying super asset class?

A. Commodity B. Credit C. Equity D. Rate

2. Which of the following has higher credit risk? (NISM workbook)

A. Bond rated BBB B. Bond rated A C. Bond rated AAA D. All of them have same credit risk

3. Credit spread is the price of ___________.(NISM workbook)

A. Credit risk B. Reinvestment risk C. Price risk D. All of the above

4. If the long-term rate is 10% and short-term rate is 8%, the shape of term structure of rates is ___________.(NISM workbook)

A. humped B. Inverted/negative C. Normal/positive D. Flat

5. The concept of “accrued interest” applies to which of the following? (NISM workbook)

A. Zero coupon bond B. Coupon bond C. Both (a) and (b) D. None of the above

6. If the coupon of the bond increases, its Modified Duration will __________.(Other things remaining constant). (NISM workbook)

A. Increase B. Decrease C. Remain constant D. May increase or decrease

7. Which of the following is the role of derivatives? (NISM workbook)

A. Risk management B. Cash or liquidity management C. Financing D. All of the above

8. Which of the following derivatives have the largest market size globally? (NISM workbook)

A. Commodity derivatives B. Currency derivatives C. Interest rate derivatives D. Equity derivatives

9. What is the settlement method for 91-day bill futures? (NISM workbook)

A. Can be cash or physical B. Cash C. Physical D. None of the above

10. Which of the following is the last trading day for cash settled 10-year bond futures? (NISM workbook)

A. Two business days after the first business day of the Expiry Month B. Seven business days before the last business day of the Expiry Month C. Two business days before the last business day of the Expiry Month D. Last Thursday of Contract Month