nism 8 mock test - Quiz Questions (Page 1 of 2)
This quiz contains 20 questions.
Question 1: What is the primary function of a clearing corporation?
- Promote liquidity
- Settle trades (Correct Answer)
- Create regulations
- Make loans
Question 2: Which instrument is typically not considered an equity derivative?
- Option
- Futures
- Bond (Correct Answer)
- Swap
Question 3: What does 'hedging' primarily aim to do in trading?
- Increase returns
- Speculate prices
- Minimize risk (Correct Answer)
- Maximize leverage
Question 4: Which term describes the right to sell an asset at a specified price before a certain date?
- Put option (Correct Answer)
- Forward contract
- Short sell
- Call option
Question 5: In derivative trading, what is 'leverage' often used for?
- Reducing fees
- Increasing potential returns (Correct Answer)
- Hedging against risk
- Shortening contract times
Question 6: Which is a characteristic of a futures contract?
- Customizable terms
- Cash settlement
- Standardized contracts (Correct Answer)
- No expiry date
Question 7: How are call options beneficial for investors?
- Fixed dividend
- High stability
- Right to buy (Correct Answer)
- Assured sale
Question 8: Who is a 'bear' in the stock market?
- Optimistic investor
- Uncertain trader
- Price fall predictor (Correct Answer)
- New market entrant
Question 9: What is the significance of an 'expiry date' in options trading?
- Rate of interest
- Legal validity
- Option exercise deadline (Correct Answer)
- Dividend announcement
Question 10: What is 'arbitrage' in finance?
- Market speculation
- Taking advantage of price differences (Correct Answer)
- Predicting price falls
- Long-term investment
Test your skills with our NISM 8 mock test that focuses on equity derivatives. This simple quiz helps you explore key ideas like derivative markets and trading strategies, all made easy to understand. It’s a friendly way to boost your knowledge before heading for the Series 8 certification. Give it a try and see how ready you really are!
