Free NISM Series IV Interest Rate Derivatives Mock Test 2026

About the NISM Series IV Interest Rate Derivatives exam

NISM Series IV covers exchange-traded interest rate derivatives in India: bonds and T-bills, yields and how they relate to prices, interest rate futures and options, and the trading, clearing and risk-management rules around them. It is the certification for people dealing in the interest rate derivatives segment of a trading member, and a useful foundation for anyone working near the fixed-income market.

This paper is heavier on numbers than most NISM exams. Be comfortable with yield and price calculations, forward rates, contract values for T-bill and bond futures, and tick values. The conceptual units (regulation, accounting, conduct) are shorter but easy marks if you have read them.

Take each mock test in one sitting under the 2-hour limit, then review every wrong answer against the matching unit of the NISM workbook before you start the next test. The sample questions below show the style, with correct answers.

Conducted by National Institute of Securities Markets (NISM). Official website

NISM Series IV Interest Rate Derivatives exam pattern

The official pattern for the NISM-Series-IV: Interest Rate Derivatives Certification Examination, as published by National Institute of Securities Markets (NISM).

Source: NISM (verified Oct 2026) . Exam bodies revise patterns; confirm on the official page before you book.

NISM Series IV Interest Rate Derivatives syllabus

9 units in the official curriculum.

1. 1Introduction to Interest Rate, Interest Rate Instruments and Fixed Income Market
2. 2Interest Rate Derivatives
3. 3Exchange Traded Interest Rate Options
4. 4Strategies Using Exchange Traded Interest Rate Derivatives
5. 5Trading Mechanism in Exchange Traded Interest Rate Derivatives
6. 6Clearing, Settlement and Risk Management in Exchange Traded Interest Rate Derivatives
7. 7Regulatory Framework for Exchange Traded Interest Rate Derivatives
8. 8Accounting and Taxation
9. 9Code of Conduct and Investor Protection Measure

NISM's curriculum page lists the units but does not publish unit-wise weightage. Source: NISM (verified Oct 2026)

15 sample NISM Series IV Interest Rate Derivatives questions with answers

Taken from the question bank our tests use. Try each one, then open “Show answer”. Our questions are drafted with AI and reviewed by people against the official syllabus; how we make questions.

1. Question 1 · Chapter 6 · Market data · Medium

   For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 6 market data, why should a trader examine both price change and open-interest change? Select the most accurate fixed-income derivatives interpretation.

   1. A.The combination helps distinguish fresh positioning from position closure
   2. B.Open interest alone fixes the next settlement price
   3. C.Price change is irrelevant in derivatives
   4. D.The two figures must always move in the same direction
   Show answer

   Correct answer: A. The combination helps distinguish fresh positioning from position closure

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2. Question 2 · Chapter 8 · SCRA · Easy

   In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 8 scra, which provision in the SCRA definition allows an equity futures contract to be treated as a security? Select the most accurate fixed-income derivatives interpretation.

   1. A.Derivatives are expressly included within securities
   2. B.Every future payment is a government security
   3. C.Only instruments carrying voting rights are securities
   4. D.All private commercial agreements are listed securities
   Show answer

   Correct answer: A. Derivatives are expressly included within securities

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3. Question 3 · Chapter 10 · Kyc · Easy

   In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 10 kyc, why is periodic KYC updating required? Select the most accurate fixed-income derivatives interpretation.

   1. A.It replaces transaction monitoring
   2. B.Client identity, address, ownership, and risk circumstances may change
   3. C.Option contracts never expire
   4. D.It recalculates index values
   Show answer

   Correct answer: B. Client identity, address, ownership, and risk circumstances may change

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4. Question 4 · Chapter 9 · Hedge accounting · Medium

   For a debt portfolio manager concerned about rate movements, focusing on chapter 9 hedge accounting, which hedge-accounting models are recognized? Apply the Series IV fixed-income convention while selecting the correct response.

   1. A.FIFO, LIFO, and average cost
   2. B.Fair value hedge, cash flow hedge, and hedge of a net investment in a foreign operation
   3. C.Cash, spot, and forward
   4. D.Call, put, and futures
   Show answer

   Correct answer: B. Fair value hedge, cash flow hedge, and hedge of a net investment in a foreign operation

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5. Question 5 · Chapter 3 · Bond futures tick · Medium

   For a clearing and settlement case in interest-rate derivatives focusing on chapter 3 bond futures tick, a risk management team holds 2 cash-settled GOI bond futures lots. With tick size INR 0.0025 and 2,000 units per lot, what is the position-value change for one tick? Use the Indian exchange-traded interest-rate derivatives framework.

   1. A.INR 100
   2. B.INR 0.005
   3. C.INR 10
   4. D.INR 5
   Show answer

   Correct answer: C. INR 10

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6. Question 6 · Chapter 4 · Call put · Easy

   During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 4 call put, what does a call option give its buyer? Choose the answer that best fits the interest-rate-derivatives exam context.

   1. A.The obligation to buy the underlying at the spot price
   2. B.The obligation to sell the underlying at the futures price
   3. C.The right to buy the underlying at the strike price
   4. D.The right to sell the underlying at the strike price
   Show answer

   Correct answer: C. The right to buy the underlying at the strike price

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7. Question 7 · Chapter 6 · User hierarchy · Easy

   In an Indian ETIRD compliance and settlement case, focusing on chapter 6 user hierarchy, who is the highest-level user in a trading firm's F&O system hierarchy? Choose the answer that best fits the interest-rate-derivatives exam context.

   1. A.Dealer
   2. B.Authorised Person
   3. C.Corporate Manager
   4. D.Branch Manager
   Show answer

   Correct answer: C. Corporate Manager

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8. Question 8 · Chapter 10 · Sales practices · Easy

   During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 10 sales practices, a salesperson recommends naked option writing to a retiree seeking capital preservation. What is the main sales-practice failure? Choose the answer that best fits the interest-rate-derivatives exam context.

   1. A.The recommendation is unsuitable for the client's risk profile and objective
   2. B.The option has an expiry date
   3. C.The trade uses an exchange
   4. D.The client has completed KYC
   Show answer

   Correct answer: A. The recommendation is unsuitable for the client's risk profile and objective

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9. Question 9 · Chapter 9 · Fair value hedge · Medium

   In a Series IV question focused on fixed-income market mechanics, focusing on chapter 9 fair value hedge, what is a fair value hedge? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

   1. A.A hedge of exposure to changes in fair value attributable to a specified risk
   2. B.A tax set-off
   3. C.A margin deposit
   4. D.A hedge only of future salary
   Show answer

   Correct answer: A. A hedge of exposure to changes in fair value attributable to a specified risk

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10. Question 10 · Chapter 3 · Bond futures tick · Medium

    In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 3 bond futures tick, a long-term investor holds 3 cash-settled GOI bond futures lots. With tick size INR 0.0025 and 2,000 units per lot, what is the position-value change for one tick? Select the most accurate fixed-income derivatives interpretation.

    1. A.INR 7.5
    2. B.INR 150
    3. C.INR 0.0075
    4. D.INR 15
    Show answer

    Correct answer: D. INR 15

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11. Question 11 · Chapter 4 · Call put · Easy

    For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 4 call put, what does a put option give its buyer? Apply the Series IV fixed-income convention while selecting the correct response.

    1. A.The right to buy the underlying at the strike price
    2. B.The obligation to sell the underlying at the spot price
    3. C.The right to sell the underlying at the strike price
    4. D.The obligation to buy the underlying at the futures price
    Show answer

    Correct answer: C. The right to sell the underlying at the strike price

    Report an error

12. Question 12 · Chapter 6 · User hierarchy · Medium

    For a debt portfolio manager concerned about rate movements, focusing on chapter 6 user hierarchy, which function is specifically available to the Corporate Manager? Apply the Series IV fixed-income convention while selecting the correct response.

    1. A.Issuing PAN numbers to clients
    2. B.Defining exposure limits for branches
    3. C.Viewing only the user's own trades
    4. D.Clearing trades through a clearing bank
    Show answer

    Correct answer: B. Defining exposure limits for branches

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13. Question 13 · Chapter 10 · Sales practices · Easy

    For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 10 sales practices, what should a derivatives salesperson do before recommending a complex strategy? Apply the Series IV fixed-income convention while selecting the correct response.

    1. A.Promise a minimum return
    2. B.Ask only which stock the client likes
    3. C.Ignore potential losses
    4. D.Assess the client's objectives, financial capacity, knowledge, and risk tolerance
    Show answer

    Correct answer: D. Assess the client's objectives, financial capacity, knowledge, and risk tolerance

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14. Question 14 · Chapter 9 · Cash flow hedge · Medium

    For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 9 cash flow hedge, what is a cash flow hedge? Use the Indian exchange-traded interest-rate derivatives framework.

    1. A.A hedge of exposure to variability in cash flows attributable to a specified risk
    2. B.A bond auction
    3. C.A hedge of clean price only
    4. D.A default waterfall
    Show answer

    Correct answer: A. A hedge of exposure to variability in cash flows attributable to a specified risk

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15. Question 15 · Chapter 3 · Tbill contract value · Hard

    For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 3 tbill contract value, a trader buys 1 lots of 91-day T-bill futures quoted at a discount yield of 4.5%. Using contract value = 2,000 x (100 - 0.25 x yield) x lots, what is the contract value? Choose the answer that best fits the interest-rate-derivatives exam context.

    1. A.INR 1,99,728
    2. B.INR 49,438
    3. C.INR 1,97,750
    4. D.INR 1,91,000
    Show answer

    Correct answer: C. INR 1,97,750

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Frequently asked questions

What is the NISM Series IV exam pattern?

According to NISM, the exam has 100 questions for 100 marks, to be completed in 2 hours. The passing score is 60%.

Is there negative marking in NISM Series IV?

There is negative marking of 25% of the marks assigned to a question, so a wrong answer costs a quarter mark. Leaving a question blank costs nothing.

Is NISM Series IV calculation-heavy?

It has more numerical questions than most NISM papers: bond pricing and yields, forward rates, and futures contract and tick values. Practise these until they are quick, because the paper is timed.

Do your answers come with explanations?

Not yet. You get your score and the correct answer to every question. Use the NISM workbook to understand the reasoning behind any question you miss.

Are these NISM Series IV Interest Rate Derivatives mock tests really free?

Yes. All 10 tests can be attempted free, with no card and no locked content. Each has 100 questions and a 120-minute timer. The site is kept free by advertising; ads are labelled and never appear inside a test.

Can I retake a test, and do I need an account?

You can retake any test as often as you like. A free account (name and email only) saves your answers, scores and attempt history.

I think an answer is wrong. What should I do?

Use the "Report an error" link under the question, or email support@freetestseries.com with the question ID. We review reports within 2 working days and fix confirmed mistakes.

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