Practice Test

Q1) BANK Nifty is a derivative contract on NSE_______? Show Answer

Q2) CNX IT is a derivatives contract on NSE. _______ Show Answer

Q3) The purchase of share in one market and the simultaneous sale in a different market to benefit from price differentials is known as Show Answer

Q4) Selling short a stock means _________. Show Answer

Q5) The growth of derivative increased______ in asset price in financial market Show Answer

Q6) Daily Mark to Market settlement of futures takes place on ______ basis. Show Answer

Q7) _______ is a form of basket options Show Answer

Q8) Derivative help in discovery of future as well as current price Show Answer

Q9) Which of the below option is the best way to manage risk in the underlying cash market? Show Answer

Q10) Which exchange first started trading in financial futures? Show Answer

Q11) Underlying assets can be__________. Show Answer

Q12) Underlying assets can be following except__________. Show Answer

Q13) Which of the following is not a derivative? Show Answer

Q14) __________ is a customized contract for future date. Show Answer

Q15) Forwards are__________ contracts. Show Answer

Q16) Call option gives right to __________. Show Answer

Q17) Put option gives right to __________. Show Answer

Q18) Hedgers use derivatives to __________ their risk. Show Answer

Q19) OOTC market is __________ regulated market. Show Answer

Q20) Exchange traded contract are customized Show Answer

Q21) Derivative market does not involve liquidity risk Show Answer

Q22) Operation risk of derivatives market involve __________. Show Answer

Q23) Future gives right to the buyer but not obligation. Show Answer

Q24) Option trading first time taken place in 2015. Show Answer

Q25) 'Cotton' cannot be an underlying asset. Show Answer

Q26) Counter party risk is the risk arising due to a failure of a political party of the central government. Show Answer

Q27) Derivative markets mostly comprise of _______. Show Answer

Q28) Diversification is used to control unsystematic risks. Show Answer

Q29) Diversification is used to control systematic risks. Show Answer

Q30) A derivative contract made directly over telephone by 2 parties is called futures contract. Show Answer

Q31) ETFs can be ________ Show Answer

Q32) The NEAT F&O trading system __________ Show Answer

Q33) In India context, derivatives includes: A) A security from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security; B) A contract which derives its value from the prices, or index of prices, of underlying securities; Show Answer

Q34) In an equity scheme, fund can hedge its equity exposure by selling stock index futures. Show Answer

Q35) If a person buys a share in one market & the simultaneously sells in a different market to benefit from differential is known as _______. Show Answer

Q36) Arbitrage is a _______. Show Answer

Q37) Hedging is _______. Show Answer

Q38) Which of the following cannot be an underlying for a Financial Derivative contract? Show Answer

Q39) Derivatives are a contract or a product whose value is derived from value of some other assets known as __________. Show Answer

Q40) Factors driving the growth of financial derivatives is / are Show Answer

Q41) __________ are exchange traded forward contract. Show Answer

Q42) An __________ is a contract that gives the right but not an obligation to buy or sell underling asset Show Answer

Q43) Options are of __________ types. Show Answer

Q44) These are __________ type of participants is the derivatives market. Show Answer

Q45) Which of the following is not a participant in the derivatives market? Show Answer

Q46) __________ take position in derivative market to reduce their risk. Show Answer

Q47) __________ take position in derivative market to make huge profits. Show Answer

Q48) Price of futures on stock exchange is determined by the interaction of __________ and __________. Show Answer

Q49) __________ guarantees contract performance in case of exchange traded contracts Show Answer

Q50) Derivatives are suitable for person having low risk appetite. Show Answer

Q51) T-Bond futures contract was introduced in __________. Show Answer

Q52) Which risks can be managed by Selling Index Futures? Show Answer

Q53) Hedging is a tool used to protect ones portfolio against any downturn by going short in index. Show Answer

Q54) In a derivatives market, a person who takes the risk are ______. Show Answer

Q55) Derivatives market helps shift of speculative trades from unorganized market to organized market. Show Answer

Q56) Weekly options trading commenced on NSE in ___________. Show Answer

Q57) In India context, derivatives includes: A) A security from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security; B) A contract which derives its value from the prices, or index of prices, of underlying securities. Show Answer

Q58) Operational risks include losses due to Show Answer

Q59) The use of derivative products it is possible to partially or fully transfer price risk by _____ asset price Show Answer

Q60) Operational risks include losses due to ____________. Show Answer

Q61) On the derivative exchanges, all the orders entered on the Trading System are at prices exclusive of brokerage. Show Answer

Q62) ______risk is the component of price risk that is unique to particular events of the company and/or industry & this risk can be reduced to a certain extent by diversifying the portfolio. Show Answer

Q63) Operational Risks includes losses due to _______. Show Answer

Q64) Losses due to operational risk include losses due to ______. Show Answer

Q65) An exchange traded option after maturity ______. Show Answer

Q66) The basic test of whether a trade done in future market is for hedging or speculation is centered on the premise that there already exit a related commercial position which is exposed to the risk due to price fluctuation. Show Answer

Q67) On 18th November 1996 SEBI set up a __________ member committee under chairmanship of or L.C gupta. Show Answer

Q68) In __________ the SCRA was amended to include derivatives in the definition of securities. Show Answer

Q69) Trading in index option commenced in June __________. Show Answer

Q70) A __________ is an agreement to exchange cash flows in the future according to a prearranged formula. Show Answer

Q71) __________ helps market participants to manage risk associated with interest rate. Show Answer

Q72) __________ take position in derivative market to earn risk free profits by exploiting a price difference in different markets. Show Answer

Q73) Which of the following is not a feature of OTC derivatives market? Show Answer

Q74) __________ guarantees contract performance in case of OTC traded contracts Show Answer

Q75) Derivatives market facilitates transfer of risk. Show Answer

Q76) Derivatives market eliminates risk completely. Show Answer

Q77) Model risk disclosure document is issued by the trading member to their __________ clients. Show Answer

Q78) In India, the first exchange traded financial derivative commenced with the trading of _______. Show Answer

Q79) Which of the following Act governs the trading of derivatives in India? Show Answer

Q80) Of the below mentioned contracts, which are traded on registered derivative exchange in India? Show Answer

Q81) The speculator plays an important role in the future market because – Show Answer

Q82) What does selling short a stock means? Show Answer

Q83) In India, the derivatives product can be traded by _________. Show Answer

Q84) Operational risks include losses due to ______. Show Answer

Q85) Arbitrage is a tool used to protect ones portfolio against any downturn by going short in index. Show Answer

Q86) When compared to cash market, there are more chances that the investor does not properly understand risk involved in the derivative market. Show Answer

Q87) Hedging would ensure that your profits are always on the higher side compared to an unheeded position. Show Answer

Q88) OTC derivative market is less regulated market because these transactions occurs in private among qualified counter parties, who are supposed to be capable enough to take care of themselves. Show Answer

Q89) Derivatives market helps in transfer of various risks from those who are exposed to risk but have low risk appetite to participate with high risk appetite. Show Answer