Test your knowledge

Futures and Options Quiz - Level 4

10 Mins Quiz about stock trading instrument such as equity, futures and options, this can be take by any individual who has trading instrument. You will see one question at a time; get your result at the end.

1. Q1. Equity Share:

   AIs a part of ownership of the companyBIs the contract between the Buyer and SellersCIs the contractual agreement between the Company and Share holder.
2. Q2. Share Bought and Sold on same day is considered as:

   AIntraday TradingBPositional TradingCInvestments
3. Q3. Can a trader sell stocks, even without holding an equity share in their account?

   AYes, It is called as short PositionBNo – Not allowed in NSECYes, we can create short position but need to be bought back before 3:30 PM
4. Q4. What happens if, Short Positions in Equity Shares remain open after 3:30PM?

   AExchange will do the settlement process by choosing auction marketsBPenalty will be imposed to the traderCAny excess charges paid by exchange to buy the stock should to passed on to Traders accountDAll of the above
5. Q5. What are Derivatives?

   AIt is the different form share capitalBIt is the contract between Buyer and seller. The value derived from its underlying assets
6. Q6. What is a Futures Contract?

   AIt is a Derivative contractBThe futures price is agreed between the buyer and seller for the predetermined future date.CBoth Buyer and Seller have rights and obligationsDAll of the above
7. Q7. Which one of the below statement is not true for Forward contracts

   AThey are not regulatedBNo Intermediate PersonCNot customizableDInvolve counterpart riskEAll of the above
8. Q8. Buyer need to pay ______________ while buying the future contract

   ANon Refundable - MarginBRefundable marginCPremium
9. Q9. Who decides the Future Contract Price?

   AIt is the agreed price between the Buyer and seller of the contractBIt is the calculated price by exchangeCNone of the above
10. Q10. Who decides the Expiry Date, Lot Size, and Margin?

    ASEBIBBrokerCThe Stock ExchangesDTrader
11. Q11. When do future contract buyers benefit because of a contract?

    APositive Price actionBNegative Price action
12. Q12. What is MTM?

    ADifference between Buying Price and selling price of the contractBDifference between the Market price and Agreed price, adjusted on day to day basis
13. Q13. What are option contracts?

    ABuyers and seller get rights, but there are no obligationsBBuyer of contract get rights, but there are no obligationsCSeller of contract get rights, but there are no obligations
14. Q14. What is a Call Option?

    AThe Buyer gets the right to buy, but there are no obligationsBThe Seller gets the right to buy, but there are no obligationsCThe Buyer gets the right to sell, but there are no obligations
15. Q15. Which of the following statements is correct with respect to option contact?

    ABuyer gets unlimited profit and seller loss is limited due to the premium he receivesBBuyer gets unlimited profit and buyer loss is limited due to the premium he paysCSeller gets unlimited profit and Buyer loss is limited during to the premium he pays
16. Q16. Call Buyers Benefit

    AIf price goes above the strike price before the expiry dateBIf price reached the strike priceCIf price goes above the strike price after the expiry date
17. Q17. The Strike Price option prices are

    AFixed price, decided by ExchangesBFixed by traders negotiating the price
18. Q18. Option are Traded by negotiating

    AStrike PriceBSpot PriceCPremium
19. Q19. Option Seller has to pay ____________ while selling the contract.

    AMargin to ExchangeBMargin to BuyerCPremium to Buyer
20. Q20. Option Writer is a

    ABuyer of option contractBSeller of option contractCExchangeDBroker of the Clients