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Buying a call and a put option of different strike and same

expiry
A. Long straddle
B. Short straddle
C. Long strangle
D. Short strangle
E. I am not attempting this question

ANSWER: C
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An exchange traded futures contract is similar to an OTC (over the

counter) derivative. Some common features are :

A. Both are tailored (e.g. non-standardiseinstruments

B. Both require margin collection by a clearing house
C. Both are exposed to credit-risk i.e. risk of non-performance by
counter party
D. None of the above
E. I am not attempting this question
ANSWER: D

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Generally, final decision of inclusion or removal of a security from

the index is taken by a specialized committee known as

A. Exchange board
B. Index Committee
C. SEBI board
D. Exchange management committee
E. I am not attempting this question
ANSWER: B

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The underlying assets for derivatives contracts in India include(s)

A. Stocks
B. Commodities
C. Index
D. All of the above
E. I am not attempting this question
ANSWER: D

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Cash market is a market with immediate or near immediate

delivery

A. TRUE
B. FALSE
C. Neither true nor false
D. Insufficient information
E. I am not attempting this question
ANSWER: A

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Increased fluctuations in underlying asset prices in financial

markets is one of the important factor for

A. Growth of financial derivatives

B. profits to traders
C. growth in production
D. decline in money flow
E. I am not attempting this question
ANSWER: A

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Intrinsic value of an option cannot be negative.

A. TRUE
B. FALSE
C. Neither true nor false
D. Insufficient information
E. I am not attempting this question
ANSWER: A

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Every clearing member needs to maintain an account with

A. State Bank of India
B. Reserve Bank of India
C. Settlement bank
D. Clearing bank
E. I am not attempting this question
ANSWER: D

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The only difference between Self Clearing Member and Trading &
Clearing Member is that
A. SCM does not have the rights to clear the trades of other
members
B. TCM does not have the rights to clear the trades of other
members
C. SCM does not have the rights to trade for other members
D. TCM does not have the rights to trade for other members
E. I am not attempting this question
ANSWER: A
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The type of margin which is collected from the member before

the start of the trading of the next day is ______.
A. Mark to Market margin
B. Initial margin requirements
C. Extreme loss margin
D. Capital adequacy
E. I am not attempting this question
ANSWER: A

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