Practice Set - 2 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

Which strategy limits both profit and loss?

Question 2

Which strategy involves buying both call and put with same strike and expiry?

Question 3

Which type of trader benefits from arbitrage?

Question 4

Which position benefits from time decay?

Question 5

A hedger uses derivatives to:

Question 6

Which scenario leads to arbitrage opportunity?

Question 7

If volatility increases, option premium:

Question 8

Which derivative involves exchange of cash flows?

Question 9

If spot price equals strike price, option is:

Question 10

Which type of option has highest premium?

Question 11

What happens to option premium as expiry approaches?

Question 12

A long strangle strategy is most profitable when:

Question 13

Which factor has least impact on option pricing?

Question 14

A trader buys a call option and the stock price remains below the strike price till expiry. What will be the outcome?

Question 15

Which derivative position has unlimited profit and unlimited loss?

Question 16

If interest rates increase, call option premium generally:

Question 17

Which condition increases time value of an option?

Question 18

Which situation creates maximum loss for a short put option seller?

Question 19

Which derivative position benefits from falling prices?

Question 20

Which factor contributes to basis risk?

Question 21

A futures contract has no counterparty risk due to:

Question 22

Which option strategy benefits from low volatility?

Question 23

Which factor increases likelihood of exercising a call option?

Question 24

Which option has zero intrinsic value?

Question 25

Practice Set - 2