Q1. If an option is out of the money and the strike price of the option is lower than the spot
price of the underlying, then we are referring to ____.
- A Put Option
- A Call option
- An European Option
- An American option
Q2. Nifty is at 5200. A put option at 5000 strike price is trading at Rs . 150. What is the
intrinsic value of the option?
- 150
- 200
- 0
- 350
Q3. Which of the following is an exchange traded contract?
- Futures on Nifty
- Forward contract on oil
- A 10 year loan
- An interest rate swap
Q4. All December 2009 stock Futures contracts traded on NSE will expire on :
- 3rd Thursday of December 2009
- Exchanges decides on expiry day and will update the investors on 1st December 2009
- Last Thursday of December 2009
- Last Friday of December 2009
Q5. Nifty is at 3900. What should be the fair price of Nifty futures expiring 180 days from
today. Risk free rate is 8% p.a.
- 4027
- 4083
- 4059
- 4031
Q6. Derivatives help in ____.
- Improving Market Efficiency
- Risk Management
- Price Discovery of the underlying
- All of the above
Q7. An investor is long 2 contracts of Nifty futures purchased at Rs. 5035 each. The next morning a scam is disclosed of a large company because of which markets sell off and Nifty
futures goes down to Rs. 4855. What is the mark to market for the investor? (1 Nifty contract is 50 shares).
- Rs. 18000
- Rs. -9000
- Rs. 9000
- Rs. -18000
Q8. The parties for the Futures contract have the flexibility of closing out the contract prior
to the maturity by squaring off the transactions in the market. State true or false.
- FALSE
- TRUE
Q9. An investor has Unitech shares in her portfolio. RBI is increasing interest rates which is
negative for the stock. She wants to protect the downside in the stock as she feels RBI will
decide on increasing interest rates in the next 3 months. What should she do?
- Buy 2 month put option of Unitech
- Buy 1 month put option of Unitech
- Buy 3 month put option of Unitech
- Buy 3 month call option of Unitech
Q10. An investor sells 3 lots of Nifty futures at Rs. 5231 each. On that day Nifty closes at Rs.
5310 in the futures market. What is the mark to market for the investor if any? One lot of Nifty
is 50 shares
- Profit of Rs. 13000
- Profit of Rs. 11000
- Loss of Rs. 11850
- Loss of Rs. 10000
