Sample Questions
NISM-Series-4: Interest Rates Derivatives Mock Tests — 5 random MCQs with answers & explanations
← Back to NISM-Series-4: Interest Rates Derivatives Mock TestsThese 5 questions are randomly selected (standard MCQs only, not case-based).
Q1 What is the maturity period of the underlying asset for Treasury Bill futures in India?
Explanation:
The actual underlying for T-Bill futures traded in India is the 91-day Treasury Bill. None of the other options listed are correct.
Marks: 1
Q2 How are futures contracts for 91-day treasury bills usually settled?
Explanation:
These contracts are cash-settled, meaning at the end of the contract, no actual treasury bills change hands. Instead, the difference between the agreed price and the market price is paid in cash.
Marks: 1
Q3 What does "Macaulay Duration" measure?
Explanation:
Duration tells you the "average" time it takes to get your money back. A higher duration means you have to wait longer, making the bond more sensitive to interest rate changes.
Marks: 1
Q4 If a bond has a stated interest rate of 6% but adds interest to the principal twice a year, the actual yearly return will be:
Explanation:
This is called compounding. Because you earn interest on your interest every six months, the actual (effective) rate ends up being slightly higher than the stated 6%.
Marks: 1
Q5 The "Dirty Price" of a bond is calculated as:
Explanation:
The "Dirty Price" is the total amount of cash that actually changes hands. it includes the price of the bond (Clean Price) plus the interest earned up to that day.
Marks: 1
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