Practice Test

Q1) SCRA derivative include a security ‘loan’ whether secured or unsecured any other form of security Show Answer

Q2) Money & securities deposited by clients with the trading members should be kept by them in a separate clients account. Show Answer

Q3) Daily Trading Price Limits define the maximum percentage by which the price of a future contract can rise above or fall below the previous day settlement price. Show Answer

Q4) A default by a member in derivatives segment will not be treated as default in the cash segment of the exchange. Show Answer

Q5) The derivative segment of s Stock Exchange is under the same governing council as the cash segment. Show Answer

Q6) The net worth criterion for professional clearing members is the same as that for trading cum clearing members. Show Answer

Q7) Trading members are require to possess a higher level of capital adequacy (as per Balance Sheet) than clearing members. Show Answer

Q8) The trading members on the Exchanges derivatives segment are not required to be registered with SEBI. Show Answer

Q9) The regulatory framework for Derivatives market in India have been developed by _______. Show Answer

Q10) NISM stands for ________. Show Answer

Q11) As per SEBI rules, a stock broker can be suspended from the derivatives segment if _______. Show Answer

Q12) The maximum brokerage chargeable by a trading member in relation to trades affected in the contract admitted to dealing on the F&O segment of NSCIL is fixed at _____ of the contract value, exclusive of statutory levies. Show Answer

Q13) As per the recommendation of L.C Gupta committee, CROSS MARGINING (Which takes into account the combined position in the cash & derivative market) is currently not permitted. Show Answer

Q14) For calculation of minimum net worth of members of derivative exchange, the non allowable asset include – Show Answer

Q15) Main objective of Trade Guarantee Fund (TGF) are – Show Answer

Q16) As per the L.C Gupta committee recommendations a separate Investors Protection Fund must be created for derivative segment. Show Answer

Q17) A major recommendation of L.C Gupta committee was that a separate Investor Protection Fund must be created for derivatives segment. Show Answer

Q18) SEBI’s centralized web based complaints redress system which provides online access 24*7 is called ______.SERA Show Answer

Q19) The trading members are required to maintain a net worth of minimum Rs.4 crores. Show Answer

Q20) The trading members are required to have qualified approved user and sales person who have passed a certification programme approved by __________. Show Answer

Q21) Selling short a stock means _________. Show Answer

Q22) The clearing members in derivative exchange are required to make a minimum deposit of Rs.20 Lakhs with the exchange/clearing corporation in the form of liquid asset. Show Answer

Q23) On the National stock exchange, for its index futures what would be the opening day of its April series? Show Answer

Q24) In a stock fails to meet these retention criteria for 3Months consecutively, exiting unexpired contracts may be permitted to trade till expiry & new strikes may also be introduced in the existing contract months. Show Answer

Q25) The clearing corporation can transfer a defaulting member’s client’s position to ______. Show Answer

Q26) The trading member/FII/Mutual Fund position limits in equity index futures contract is higher of Rs. _____ crores or 15% of the total open interest in the market in equity index futures contracts. Show Answer

Q27) Who monitors the collection of initial margin? Show Answer

Q28) For FII’s the short position in index derivatives should not exceed long position in delivery holdings. Show Answer

Q29) Trade Guarantee Fund is maintained for _______. Show Answer

Q30) As per SEBI rules, a derivative exchange should have a minimum of ______ members. Show Answer

Q31) Who finalizes lot size & the margins in the derivative segment? Show Answer

Q32) The liquid asset which are to be maintained by clearing members with Clearing Corporation can include Gold & Silver jewelry after applying standard 20% haircut. Show Answer

Q33) The market wide limit of open position of futures & options contract on a particular underlying stock should not be ______. Show Answer

Q34) What is done if a client defaults in making payment in respect to his daily settlement? Show Answer

Q35) The system in which trading is done through various computers which are attached to a central computer is called online trading. Show Answer

Q36) A penalty or suspension of registration of a stock broker from derivatives exchange/segment under SEBI (stock broker & sub-broker) regulation 1992, can take place if ______. Show Answer

Q37) A stock exchange has ONLINE SURVILIENCE capacity to monitor the _______. Show Answer

Q38) The net worth of clearing members does not include – Show Answer

Q39) The main objectives of Trade Guarantee Fund is /are _______. Show Answer

Q40) As per J.R Verma committee recommendations, volatility should be calculated based on ______ log arithmetic daily returns. Show Answer

Q41) A clearing member is required to provide liquid assets & these liquid assets should be at least 75% in cash, bank FDs etc & balance 25% in non cash assets. Show Answer

Q42) Liquid assets offered by a clearing member to a Clearing Corporation can include Mutual Fund units & bank guarantees. Show Answer

Q43) The Non Cash Component of Liquid Assets which are given as a form of margin can include Equity shares which are physical form. Show Answer

Q44) To facilitate Foreign Institutional Investors, SEBI has allowed them to make weekly payments of Mark to Market margin due to their huge volumes of trading. Show Answer

Q45) As a special provision for NRI, the Mark to Market margin payable them can be done on a consolidated weekly basis. Show Answer

Q46) The brokers of an exchange can be a part of the governing board of the derivatives segment. Show Answer

Q47) The minimum net worth requirement for a trading member of Capital market segment & F&O segment is ______. Show Answer

Q48) It is recommended but not compulsory that all stock exchanges of India have a uniform settlement cycle. Show Answer

Q49) All member brokers in the derivative segment should be inspected by the exchange at least __________ a year. Show Answer

Q50) Trading Members are required to maintain trade confirmation slips and exercise notices from the trading system for a period of _________ years. Show Answer

Q51) SCRA derivative include a security ‘loan’ whether secured or unsecured any other form of security Show Answer

Q52) An ‘authorized person’ in the Futures & Options segment is ________. Show Answer

Q53) The main objective of Trade Guarantee Fund (TGF) at the exchanges is _________________. Show Answer

Q54) A clearing member has deposited eligible liquid asset of Rs.75 lakhs. The exchange has minimum liquid net worth requirement of Rs.50 Lakhs. The member has not entered into any transactions so far. What is the margin available for trading? (In Lakhs) Show Answer

Q55) The absolute amount of minimum capital adequacy requirement for derivative brokers is same as that for cash market. Show Answer

Q56) If a clearing members defaults, the margin paid on his own account only is allowed to be used by the clearing corporation for realizing its dues from the member. The client’s margin remains unaffected. Show Answer

Q57) The clearing member/trading member is require to disclose to the clearing corporation details of any person(s) acting in concert who together own ___% or more of the open interest of all futures & options contracts on a particular underlying index on the stock exchange. Show Answer

Q58) For calculation of minimum net worth of members of derivative exchange, the non allowable asset include- Show Answer

Q59) Mr. R wants to sell 17 contracts of January series at Rs. 4550 & Mr. S wants to sell 20 contracts of February series at Rs. 4500. Lot size is 50. The initial margin is fixed at 9%. How much initial margin is required to be collected from both these investor by the broker? Show Answer

Q60) Can client position be netted off against each other while calculating initial margin on the derivatives segment? Show Answer

Q61) If the liquid assets maintained by clearing member Mr. Ram are higher than that clearing member Mr. Shyam, which of the below option is/are true? Show Answer

Q62) The client level position limits in derivative trading should not exceed 5% of the free float market capitalization or 10% of the open interest in all derivative contracts in the same underlying stock whichever is higher. Show Answer

Q63) FII long positions in index derivatives should not exceed the FII’s holding of _____. Show Answer

Q64) A scrip will be banned in the derivatives market if the open interest ________. Show Answer

Q65) Tick size depends on – Show Answer

Q66) Margins can be deposited by trading members in the form of _______. Show Answer

Q67) The total liquid assets comprise of at least 60% of the cash component & the rest is non cash component Show Answer

Q68) _______ refers to when a securities professionals making unnecessary & excessive trades in customer accounts for the sole purpose of generating commissions. Show Answer

Q69) The cash component of Liquid Securities can include Units of money market mutual fund
& Gilt funds where applicable haircut is 10%.
Show Answer

Q70) The net worth of a trading member does not include – Show Answer