Practice Set - 1 | Practice Set | NISM Series VIII: Equity Derivatives Certification Examination

Question 1

Which of the following is a financial underlying asset?

Question 2

Exchange-traded derivatives reduce which type of risk significantly?

Question 3

Which of the following is NOT a feature of OTC derivatives?

Question 4

Which type of risk arises due to unfavorable price movements?

Question 5

Liquidity risk in derivatives refers to:

Question 6

The Tulip Mania in Holland is associated with:

Question 7

Which of the following statements is correct regarding options?

Question 8

Legal risk in derivatives trading is associated with:

Question 9

Futures contracts differ from forwards primarily because:

Question 10

Exchange-traded derivatives are characterized by:

Question 11

In a forward contract, both parties are:

Question 12

A derivative is best defined as a contract whose value is derived from:

Question 13

Which derivative product gives the right but not the obligation to buy or sell an asset?

Question 14

Which of the following is an OTC derivative?

Question 15

Forward contracts traded in early European trade fairs primarily involved:

Question 16

Speculators in derivatives markets primarily aim to:

Question 17

Which organization introduced the first exchange-traded futures contracts in 1865?

Question 18

Which of the following is NOT a derivatives product?

Question 19

Which market structure allows customized contracts?

Question 20

Which of the following is TRUE regarding arbitrage opportunities?

Question 21

Which market is described as a network of broker-dealers rather than a physical place?

Question 22

Derivatives help shift risk from:

Question 23

Which of the following is a characteristic of exchange-traded derivatives?

Question 24

Which derivative product is traded on exchanges with standard terms?

Question 25

Which function is performed by derivatives markets?

Question 26

Arbitrage involves:

Question 27

In India, derivatives were declared as securities under:

Question 28

Derivatives trading may not be suitable for:

Question 29

Swaps are best described as:

Question 30

Operational risk includes losses due to:

Question 31

Which factor reduces transaction costs in derivatives markets?

Question 32

Which participant uses derivatives to reduce risk exposure?

Question 33

OTC derivatives markets are generally:

Question 34

Which participant type is likely to exploit price inefficiencies?

Question 35

Which derivatives market type is more transparent?

Question 36

Which of the following was a key factor driving the growth of derivatives markets globally?

Question 37

Which participant is most likely to use derivatives for hedging currency risk?

Question 38

Which of the following best describes derivatives?

Question 39

Which contract type is standardized?

Question 40

Which risk arises due to failure of the counterparty to fulfill obligations?

Question 41

Which of the following is a key benefit of derivatives markets?

Question 42

Which entity guarantees settlement in exchange-traded derivatives?

Question 43

Which risk arises due to lack of proper documentation or execution?

Question 44

Which document should participants read before trading derivatives?

Question 45

Practice Set - 1