Sample Questions

NISM-Series-13: Common Derivatives Mock Test — 5 random MCQs with answers & explanations

← Back to NISM-Series-13: Common Derivatives Mock Test

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

Q1 Usually, income from Exchange traded derivatives is treated as _________.(NISM workbook)

A. Business income Correct Answer
B. Income from other sources
C. Salary income
D. None of the above

Explanation:

Gains or losses from trading in Exchange traded derivatives are taxable under 'Profits and Gains from Business or Profession' (PGBP) and deemed normal business income.

Marks: 1

Q2 If futures price is trading higher than theoretical fair price, how can an arbitrageur profit?

A. Buy both spot and futures
B. Sell both spot and futures
C. Sell spot and buy futures (Reverse Cash and Carry)
D. Buy spot and sell futures (Cash and Carry Arbitrage) Correct Answer

Explanation:

When futures are overpriced, buy cheap spot asset, hold it, and short overpriced futures to lock in risk-free spread.

Marks: 1

Q3 Exposure limits of Clearing Members are positively related to their liquid assets with the Clearing Corporation. Is this correct?

A. False
B. True Correct Answer

Explanation:

Higher liquid assets allow higher exposure limits. Therefore, exposure is positively related to deposited funds.

Marks: 1

Q4 Where are secondary market trades of government bonds (G-Secs) usually settled in India?

A. In a physical vault
B. On the stock exchange only
C. By handing over cash in person
D. Through accounts held with the RBI (PDO) Correct Answer

Explanation:

Most G-Sec trades are "electronic" and are settled through Subsidiary General Ledger (SGL) accounts that banks and big firms keep at the RBI.

Marks: 1

Q5 A Protective Put strategy combines:

A. Short stock and long Call
B. Long stock and long Put Correct Answer
C. Long Call and short Call
D. Long stock and short Put

Explanation:

Protective Put = Holding underlying stock + Buying a Put option for downside risk protection.

Marks: 1

Start Mock Tests →

Explore More Mock Tests

Practice structured mock tests designed exactly like real NISM exams.

Browse All Subjects Start Free Test

Sample Questions

Q1 Usually, income from Exchange traded derivatives is treated as _________.(NISM workbook)

Q2 If futures price is trading higher than theoretical fair price, how can an arbitrageur profit?

Q3 Exposure limits of Clearing Members are positively related to their liquid assets with the Clearing Corporation. Is this correct?

Q4 Where are secondary market trades of government bonds (G-Secs) usually settled in India?

Q5 A Protective Put strategy combines:

Explore More Mock Tests

Notify me when you add new Sample Questions

Create a free PassNISM account