Practice Set - 2 | Practice Set | NISM Series VIII: Equity Derivatives Certification Examination

Question 1

A stock with a low price but large market capitalization will have minimal influence in which type of index?

Question 2

A sudden increase in the weight of a stock in an equal-weighted index without rebalancing implies:

Question 3

If liquidity in a market is extremely high, the impact cost for large transactions would be:

Question 4

Which scenario best illustrates index revision?

Question 5

Which of the following would NOT directly impact index value calculation?

Question 6

A market with zero impact cost would imply:

Question 7

Which of the following would increase the bid-ask spread in a stock?

Question 8

Which index type requires the most active management?

Question 9

Which factor primarily determines whether an index reflects true market behavior?

Question 10

Which of the following is most likely to reduce bid-ask spread?

Question 11

If the ideal price is significantly different from actual execution price, it indicates:

Question 12

If bid-ask spread narrows significantly, it indicates:

Question 13

Which of the following could lead to misrepresentation in an index?

Question 14

Which of the following scenarios would most likely increase impact cost?

Question 15

Which of the following is most likely to distort the representation of a price-weighted index?

Question 16

Which scenario best explains a limitation of equal-weighted indices compared to market-cap weighted indices?

Question 17

In index maintenance, which corporate action would require adjustment to maintain index continuity?

Question 18

In the context of impact cost, the 'ideal price' is best described as:

Question 19

In an equal-weighted index, if no rebalancing occurs, the index gradually becomes:

Question 20

Which of the following best explains why diversification has diminishing returns beyond a point in index construction?

Question 21

A price-weighted index gives more importance to:

Question 22

In a highly diversified index, adding additional stocks beyond a threshold will:

Question 23

If a stock with high free float is replaced by a stock with low free float in an index, the index is likely to:

Question 24

In a price-weighted index, a stock split in a high-priced stock will most likely result in:

Question 25

Practice Set - 2