NISM sample questions with answers

Question 1

In a Series I question focused on currency-market microstructure, focusing on chapter 7 span, a portfolio contains a long call and a short call at different strikes. How should SPAN assess it? Answer as a currency futures or currency options market participant would.

Accepted Answer

As a combined option portfolio across scenarios, not as unrelated positions

Answer

Margin only the profitable leg

Answer

Ignore the long call completely

Answer

Use only the underlying's face value

Question 2

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.

Accepted Answer

The combination helps distinguish fresh positioning from position closure

Answer

Open interest alone fixes the next settlement price

Answer

Price change is irrelevant in derivatives

Answer

The two figures must always move in the same direction

Question 3

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.

Accepted Answer

Corporate Manager

Answer

Dealer

Answer

Authorised Person

Answer

Branch Manager

Question 4

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.

Accepted Answer

Defining exposure limits for branches

Answer

Issuing PAN numbers to clients

Answer

Viewing only the user's own trades

Answer

Clearing trades through a clearing bank

Question 5

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.

Accepted Answer

Derivatives are expressly included within securities

Answer

Every future payment is a government security

Answer

Only instruments carrying voting rights are securities

Answer

All private commercial agreements are listed securities

Question 6

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.

Accepted Answer

Client identity, address, ownership, and risk circumstances may change

Answer

It replaces transaction monitoring

Answer

Option contracts never expire

Answer

It recalculates index values

Question 7

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.

Accepted Answer

The recommendation is unsuitable for the client's risk profile and objective

Answer

The option has an expiry date

Answer

The trade uses an exchange

Answer

The client has completed KYC

Question 8

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.

Accepted Answer

Assess the client's objectives, financial capacity, knowledge, and risk tolerance

Answer

Promise a minimum return

Answer

Ask only which stock the client likes

Answer

Ignore potential losses

Question 9

For a clearing and settlement case in interest-rate derivatives focusing on chapter 10 kyc, what is the central purpose of Know Your Client procedures? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Establish and verify the client's identity and relevant profile

Answer

Select profitable trades automatically

Answer

Replace risk disclosure

Answer

Guarantee the client's creditworthiness

Question 10

In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 10 kyc, why is PAN important in the securities-market KYC framework? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

It acts as a key unique identifier for securities-market relationships and reporting

Answer

It guarantees tax exemption

Answer

It is an option contract code

Answer

It fixes the client's margin rate

Question 11

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.

Accepted Answer

Fair value hedge, cash flow hedge, and hedge of a net investment in a foreign operation

Answer

FIFO, LIFO, and average cost

Answer

Cash, spot, and forward

Answer

Call, put, and futures

Question 12

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.

Accepted Answer

A hedge of exposure to changes in fair value attributable to a specified risk

Answer

A tax set-off

Answer

A margin deposit

Answer

A hedge only of future salary

Question 13

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.

Accepted Answer

A hedge of exposure to variability in cash flows attributable to a specified risk

Answer

A bond auction

Answer

A hedge of clean price only

Answer

A default waterfall

Question 14

In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 hedge documentation, what is required to apply hedge accounting? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Formal designation, documentation, and effectiveness assessment as applicable

Answer

Only physical settlement

Answer

No identified risk

Answer

A guaranteed profit

Question 15

For a clearing and settlement case in interest-rate derivatives focusing on chapter 9 oci, where is the effective portion of a qualifying cash flow hedge generally recognized initially? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

Other comprehensive income subject to applicable standards

Answer

Nowhere

Answer

Share capital

Answer

Salary expense

Question 16

In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 ineffectiveness, where is hedge ineffectiveness generally recognized? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

Profit or loss as required by the applicable standard

Answer

Client margin

Answer

Share capital

Answer

Ignored permanently

Question 17

For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 margin accounting, how is initial margin generally viewed in accounting? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

A deposit or asset according to its nature, not automatically an expense

Answer

Guaranteed income

Answer

Immediate salary expense

Answer

Share capital

Question 18

During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 9 option accounting, how is option premium paid treated at inception conceptually? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

As an amount relating to the derivative asset, subject to subsequent accounting

Answer

As margin income

Answer

As zero

Answer

As bond face value

Question 19

For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 9 disclosure, what should derivative disclosures describe? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Risk-management policies, exposures, accounting policies, and relevant fair values

Answer

Only dealer names

Answer

Only coupons

Answer

No information

Question 20

In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 9 tax classification, how is eligible exchange-traded derivative income commonly classified for tax? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

Business income

Answer

Salary income

Answer

Agricultural income

Answer

Lottery income

Question 21

How are profits from eligible exchange-traded interest-rate derivative transactions generally classified for an active trader under Indian tax principles? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

Non-speculative business income

Answer

Salary income

Answer

Agricultural income

Answer

Lottery income

Question 22

In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 tax classification, why is the distinction between speculative and non-speculative business loss important? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

It affects the income against which the loss may be set off and carried forward

Answer

It determines the futures lot size

Answer

It removes the need to file a return

Answer

It changes the option strike

Question 23

For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 9 non speculative, why can eligible exchange-traded derivatives be treated as non-speculative business? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

The Income-tax Act provides an exclusion when prescribed recognized-exchange conditions are met

Answer

All derivatives are tax-free

Answer

They are physically settled

Answer

They have no profit or loss

Question 24

In an Indian ETIRD compliance and settlement case, focusing on chapter 9 loss setoff, against which income can non-speculative business loss generally not be set off in the same year? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

Salary income

Answer

Capital gains subject to law

Answer

Income from other sources subject to law

Answer

Eligible business income

Question 25

For a debt portfolio manager concerned about rate movements, focusing on chapter 9 loss carry forward, for how long may eligible non-speculative business loss generally be carried forward? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

Eight assessment years

Answer

Indefinitely without conditions

Answer

Three years

Answer

One year

Question 26

In a Series IV question focused on fixed-income market mechanics, focusing on chapter 9 tax filing, what filing condition matters for carrying forward business loss? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

The return should be filed within the prescribed due date, subject to law

Answer

Late filing always preserves it

Answer

Only an exchange statement is required

Answer

No return is needed

Question 27

For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 9 turnover, why does derivative turnover matter? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

It can affect books, audit applicability, and tax reporting

Answer

It sets MIBOR

Answer

It fixes option delta

Answer

It replaces income

Question 28

In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 turnover, for F&O tax reporting, why is turnover not simply the contract notional value? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Tax turnover methods focus on trading differences/premiums under applicable guidance rather than gross underlying notional

Answer

Notional value is always zero

Answer

Only margin is legal tender

Answer

Futures have no quantity

Question 29

In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 accounting vs tax, should accounting and tax treatment be assumed identical? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

No, they arise under different standards and laws

Answer

Yes, always

Answer

Tax rules set fair value

Answer

Neither applies to IRD

Question 30

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.

Accepted Answer

INR 10

Answer

INR 100

Answer

INR 0.005

Answer

INR 5

Question 31

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.

Accepted Answer

INR 15

Answer

INR 7.5

Answer

INR 150

Answer

INR 0.0075

Question 32

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.

Accepted Answer

INR 1,97,750

Answer

INR 1,99,728

Answer

INR 49,438

Answer

INR 1,91,000

Question 33

For a debt portfolio manager concerned about rate movements, focusing on chapter 3 bond futures tick, what is the tick value of one cash-settled GOI bond futures lot? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

INR 5

Answer

INR 102.75

Answer

INR 411

Answer

INR 1.25

Question 34

During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 3 tbill contract value, a trader buys 2 lots of 91-day T-bill futures quoted at a discount yield of 4.75%. Using contract value = 2,000 x (100 - 0.25 x yield) x lots, what is the contract value? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

INR 3,95,250

Answer

INR 98,813

Answer

INR 3,81,000

Answer

INR 3,99,203

Question 35

For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 3 tbill contract value, a trader buys 3 lots of 91-day T-bill futures quoted at a discount yield of 5%. Using contract value = 2,000 x (100 - 0.25 x yield) x lots, what is the contract value? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

INR 5,92,500

Answer

INR 5,70,000

Answer

INR 5,98,425

Answer

INR 1,48,125

Question 36

In an Indian ETIRD compliance and settlement case, focusing on chapter 9 options accounting, a written option is bought back before expiry. What determines the writer's result? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

Premium received initially minus premium paid to close, adjusted for costs

Answer

The buyer's tax rate

Answer

The underlying's face value

Answer

Only initial margin

Question 37

For a debt portfolio manager concerned about rate movements, focusing on chapter 9 exercise accounting, for a cash-settled long call exercised in the money, what accompanies recognition of premium expense? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Recognition of the favorable exercise settlement receipt

Answer

Delivery of index units

Answer

A new margin pledge

Answer

Cancellation of all prior MTM

Question 38

In a Series IV question focused on fixed-income market mechanics, focusing on chapter 9 exercise accounting, for a cash-settled short call assigned in the money, what is recognized besides premium income? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

The adverse exercise settlement payment as a loss

Answer

A purchase of index units

Answer

A dividend receivable

Answer

No further entry

Question 39

An active trader has a non-speculative derivatives business loss from ETIRD. Against which income head is same-year set-off generally not available? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

Salary income

Answer

Other income subject to applicable rules

Answer

Eligible non-speculative business income

Answer

House-property income subject to applicable rules

Question 40

For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 tax expense, which cost is most plausibly deductible against F&O business income, subject to law and nexus? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

Brokerage and exchange transaction charges incurred for the business

Answer

Personal vacation expenses

Answer

Cost of a private residence unrelated to trading

Answer

A family member's school fees

Question 41

During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 9 accounting controls, why should option premium and margin not be combined into one undifferentiated account? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

Premium is consideration for the option, while margin is collateral for performance risk

Answer

Both are always non-refundable expenses

Answer

Neither affects accounting

Answer

Both are always income

Question 42

For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 9 accounting controls, a client receives MTM profit but leaves it with the broker as available balance. What should records show? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

The MTM gain and the resulting receivable/deposit balance separately and transparently

Answer

Share capital of the broker

Answer

No gain because cash was not withdrawn

Answer

A new option purchase

Question 43

For a clearing and settlement case in interest-rate derivatives focusing on chapter 9 regulated entity, what should a regulated entity do if its sector regulator prescribes derivative accounting? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

Follow the applicable regulator’s requirements

Answer

Use tax law only

Answer

Ignore the regulator

Answer

Record no derivative

Question 44

In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 valuation control, why is independent valuation control important? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

It supports reliable fair values and prevents unchecked trader marks

Answer

It determines coupons

Answer

It guarantees profit

Answer

It replaces audit

Question 45

For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 prudence, what is prudence in recognizing derivative losses and gains? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

Apply the relevant accounting standard consistently without selectively anticipating gains

Answer

Ignore all losses

Answer

Use face value only

Answer

Recognize every expected gain immediately regardless of standards

Question 46

In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 10 sales practices, why is a statement such as 'high return with no risk' a warning sign? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

Risk and expected return are linked, and derivatives cannot eliminate all investment risk

Answer

Only banks may mention returns

Answer

Derivatives always generate losses

Answer

All high-return products are illegal

Question 47

For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 10 risk disclosure, what is the purpose of the Risk Disclosure Document? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

Explain trading risks and broker-client rights and obligations before participation

Answer

Guarantee recovery of all trading losses

Answer

Replace KYC and account-opening forms

Answer

Predict exact market prices

Question 48

In an Indian ETIRD compliance and settlement case, focusing on chapter 10 risk disclosure, why is leverage highlighted in derivatives risk disclosure? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

A small margin can control a much larger exposure, magnifying gains and losses

Answer

Leverage guarantees profit

Answer

Margin equals the full contract value

Answer

Leverage removes volatility

Question 49

For a debt portfolio manager concerned about rate movements, focusing on chapter 10 risk disclosure, what liquidity risk should a derivatives client understand? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

A position may not be closable promptly at a reasonable price

Answer

Every contract has unlimited buyers

Answer

Liquidity affects only dividends

Answer

The exchange never publishes prices

Question 50

In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 3 mibor contract value, overnight MIBOR futures are quoted at 4% for 1 lot. Using quoted rate x 100 x INR 411 x lots, what is the contract value? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

INR 1,64,400

Answer

INR 6,57,600

Answer

INR 16,440

Answer

INR 1,644

Question 51

In an Indian ETIRD compliance and settlement case, focusing on chapter 3 mibor contract value, overnight MIBOR futures are quoted at 4.5% for 3 lots. Using quoted rate x 100 x INR 411 x lots, what is the contract value? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

INR 5,54,850

Answer

INR 5,549

Answer

INR 22,19,400

Answer

INR 55,485

Question 52

In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 mibor contract value, overnight MIBOR futures are quoted at 5% for 5 lots. Using quoted rate x 100 x INR 411 x lots, what is the contract value? Select the most accurate fixed-income derivatives interpretation.

Accepted Answer

INR 10,27,500

Answer

INR 10,275

Answer

INR 1,02,750

Answer

INR 41,10,000

Question 53

For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 3 mibor tick value, a position contains 2 Overnight MIBOR futures lots. If one tick is 0.25 basis point and worth INR 102.75 per lot, what is the one-tick position change? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

INR 205.5

Answer

INR 822

Answer

INR 51.375

Answer

INR 411

Question 54

For a debt portfolio manager concerned about rate movements, focusing on chapter 3 mibor tick value, a position contains 4 Overnight MIBOR futures lots. If one tick is 0.25 basis point and worth INR 102.75 per lot, what is the one-tick position change? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

INR 411

Answer

INR 102.75

Answer

INR 822

Answer

INR 1644

Question 55

For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 mibor tick value, a position contains 6 Overnight MIBOR futures lots. If one tick is 0.25 basis point and worth INR 102.75 per lot, what is the one-tick position change? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

INR 616.5

Answer

INR 2466

Answer

INR 154.125

Answer

INR 1233

Question 56

For a debt portfolio manager concerned about rate movements, focusing on chapter 3 forward rate, the two-year spot rate is 5.5% and the one-year spot rate is 4.8%, with annual compounding. What is the one-year forward rate starting one year from now? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

6.205%

Answer

0.7%

Answer

5.5%

Answer

5.15%

Question 57

In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 forward rate, the two-year spot rate is 5.7% and the one-year spot rate is 4.95%, with annual compounding. What is the one-year forward rate starting one year from now? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

6.455%

Answer

0.75%

Answer

5.325%

Answer

5.7%

Question 58

For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 forward rate, the two-year spot rate is 5.9% and the one-year spot rate is 5.1%, with annual compounding. What is the one-year forward rate starting one year from now? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

6.706%

Answer

0.8%

Answer

5.9%

Answer

5.5%

Question 59

For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 3 bond price rate, how does a long GOI bond futures position react to falling yields? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

It generally gains because bond prices rise

Answer

It converts into a loan

Answer

It is unaffected by bond price

Answer

It necessarily loses

Question 60

In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 3 bond price rate, how does a short GOI bond futures position react to rising yields? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

It generally gains because bond prices fall

Answer

It receives the coupon automatically

Answer

It necessarily loses

Answer

It becomes a call option

Question 61

For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 3 mibor direction, how is a long Overnight MIBOR futures position different from a long bond future? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Accepted Answer

It gains from a rise in the quoted MIBOR rate, whereas a long bond future generally gains when yields fall

Answer

Bond futures are quoted as interest rates

Answer

Both always gain when yields fall

Answer

MIBOR futures have no rate exposure

Question 62

In an Indian ETIRD compliance and settlement case, focusing on chapter 3 bond futures lot, what is the lot size for cash-settled single GOI bond futures in the workbook? Use the Indian exchange-traded interest-rate derivatives framework.

Accepted Answer

2,000 units, corresponding to face value INR 2 lakh

Answer

100 units

Answer

INR 5 crore of interest

Answer

10,000 units

Question 63

In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 tbill quotation, how are 91-day T-bill futures quoted? Choose the answer that best fits the interest-rate-derivatives exam context.

Accepted Answer

100 minus the futures discount yield

Answer

Directly as accrued interest

Answer

Only as face value

Answer

As MIBOR plus spread

Question 64

For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 tbill tick, what is the tick value of one 91-day T-bill futures lot? Apply the Series IV fixed-income convention while selecting the correct response.

Accepted Answer

INR 1.25

Answer

INR 102.75

Answer

INR 5

Answer

INR 411

NISM Series I sample questions

Q1.In a Series I question focused on currency-market microstructure, focusing on chapter 7 span, a portfolio contains a long call and a short call at different strikes. How should SPAN assess it? Answer as a currency futures or currency options market participant would.

NISM Series IV sample questions

Q2.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.

Q3.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.

Q4.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.

Q5.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.

Q6.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.

Q8.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.

Q9.For a clearing and settlement case in interest-rate derivatives focusing on chapter 10 kyc, what is the central purpose of Know Your Client procedures? Select the most accurate fixed-income derivatives interpretation.

Q10.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 10 kyc, why is PAN important in the securities-market KYC framework? Choose the answer that best fits the interest-rate-derivatives exam context.

Q11.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.

Q12.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.

Q13.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.

Q14.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 hedge documentation, what is required to apply hedge accounting? Select the most accurate fixed-income derivatives interpretation.

Q15.For a clearing and settlement case in interest-rate derivatives focusing on chapter 9 oci, where is the effective portion of a qualifying cash flow hedge generally recognized initially? Choose the answer that best fits the interest-rate-derivatives exam context.

Q16.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 ineffectiveness, where is hedge ineffectiveness generally recognized? Apply the Series IV fixed-income convention while selecting the correct response.

Q17.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 margin accounting, how is initial margin generally viewed in accounting? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q18.During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 9 option accounting, how is option premium paid treated at inception conceptually? Use the Indian exchange-traded interest-rate derivatives framework.

Q19.For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 9 disclosure, what should derivative disclosures describe? Select the most accurate fixed-income derivatives interpretation.

Q20.In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 9 tax classification, how is eligible exchange-traded derivative income commonly classified for tax? Choose the answer that best fits the interest-rate-derivatives exam context.

Q21.How are profits from eligible exchange-traded interest-rate derivative transactions generally classified for an active trader under Indian tax principles? Apply the Series IV fixed-income convention while selecting the correct response.

Q22.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 tax classification, why is the distinction between speculative and non-speculative business loss important? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q23.For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 9 non speculative, why can eligible exchange-traded derivatives be treated as non-speculative business? Apply the Series IV fixed-income convention while selecting the correct response.

Q24.In an Indian ETIRD compliance and settlement case, focusing on chapter 9 loss setoff, against which income can non-speculative business loss generally not be set off in the same year? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q25.For a debt portfolio manager concerned about rate movements, focusing on chapter 9 loss carry forward, for how long may eligible non-speculative business loss generally be carried forward? Use the Indian exchange-traded interest-rate derivatives framework.

Q26.In a Series IV question focused on fixed-income market mechanics, focusing on chapter 9 tax filing, what filing condition matters for carrying forward business loss? Select the most accurate fixed-income derivatives interpretation.

Q27.For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 9 turnover, why does derivative turnover matter? Choose the answer that best fits the interest-rate-derivatives exam context.

Q28.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 turnover, for F&O tax reporting, why is turnover not simply the contract notional value? Select the most accurate fixed-income derivatives interpretation.

Q29.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 9 accounting vs tax, should accounting and tax treatment be assumed identical? Apply the Series IV fixed-income convention while selecting the correct response.

Q33.For a debt portfolio manager concerned about rate movements, focusing on chapter 3 bond futures tick, what is the tick value of one cash-settled GOI bond futures lot? Select the most accurate fixed-income derivatives interpretation.

Q36.In an Indian ETIRD compliance and settlement case, focusing on chapter 9 options accounting, a written option is bought back before expiry. What determines the writer's result? Use the Indian exchange-traded interest-rate derivatives framework.

Q37.For a debt portfolio manager concerned about rate movements, focusing on chapter 9 exercise accounting, for a cash-settled long call exercised in the money, what accompanies recognition of premium expense? Select the most accurate fixed-income derivatives interpretation.

Q38.In a Series IV question focused on fixed-income market mechanics, focusing on chapter 9 exercise accounting, for a cash-settled short call assigned in the money, what is recognized besides premium income? Choose the answer that best fits the interest-rate-derivatives exam context.

Q39.An active trader has a non-speculative derivatives business loss from ETIRD. Against which income head is same-year set-off generally not available? Use the Indian exchange-traded interest-rate derivatives framework.

Q40.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 tax expense, which cost is most plausibly deductible against F&O business income, subject to law and nexus? Choose the answer that best fits the interest-rate-derivatives exam context.

Q41.During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 9 accounting controls, why should option premium and margin not be combined into one undifferentiated account? Apply the Series IV fixed-income convention while selecting the correct response.

Q42.For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 9 accounting controls, a client receives MTM profit but leaves it with the broker as available balance. What should records show? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q43.For a clearing and settlement case in interest-rate derivatives focusing on chapter 9 regulated entity, what should a regulated entity do if its sector regulator prescribes derivative accounting? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q44.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 9 valuation control, why is independent valuation control important? Use the Indian exchange-traded interest-rate derivatives framework.

Q45.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 9 prudence, what is prudence in recognizing derivative losses and gains? Select the most accurate fixed-income derivatives interpretation.

Q46.In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 10 sales practices, why is a statement such as 'high return with no risk' a warning sign? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q47.For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 10 risk disclosure, what is the purpose of the Risk Disclosure Document? Use the Indian exchange-traded interest-rate derivatives framework.

Q48.In an Indian ETIRD compliance and settlement case, focusing on chapter 10 risk disclosure, why is leverage highlighted in derivatives risk disclosure? Select the most accurate fixed-income derivatives interpretation.

Q49.For a debt portfolio manager concerned about rate movements, focusing on chapter 10 risk disclosure, what liquidity risk should a derivatives client understand? Choose the answer that best fits the interest-rate-derivatives exam context.

Q51.In an Indian ETIRD compliance and settlement case, focusing on chapter 3 mibor contract value, overnight MIBOR futures are quoted at 4.5% for 3 lots. Using quoted rate x 100 x INR 411 x lots, what is the contract value? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q59.For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 3 bond price rate, how does a long GOI bond futures position react to falling yields? Choose the answer that best fits the interest-rate-derivatives exam context.

Q60.In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 3 bond price rate, how does a short GOI bond futures position react to rising yields? Apply the Series IV fixed-income convention while selecting the correct response.

Q61.For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 3 mibor direction, how is a long Overnight MIBOR futures position different from a long bond future? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q62.In an Indian ETIRD compliance and settlement case, focusing on chapter 3 bond futures lot, what is the lot size for cash-settled single GOI bond futures in the workbook? Use the Indian exchange-traded interest-rate derivatives framework.

Q63.In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 tbill quotation, how are 91-day T-bill futures quoted? Choose the answer that best fits the interest-rate-derivatives exam context.

Q64.For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 tbill tick, what is the tick value of one 91-day T-bill futures lot? Apply the Series IV fixed-income convention while selecting the correct response.

Q65.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 3 mibor notional, what notional principal underlies one Overnight MIBOR futures contract? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q66.For a clearing and settlement case in interest-rate derivatives focusing on chapter 3 mibor settlement, what is the final settlement rate for Overnight MIBOR futures? Use the Indian exchange-traded interest-rate derivatives framework.

Q67.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 3 basis, what is basis in the workbook’s convention? Select the most accurate fixed-income derivatives interpretation.

Q68.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 3 basis convergence, why does futures basis converge toward zero at expiry? Choose the answer that best fits the interest-rate-derivatives exam context.

Q69.During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 3 bond futures pricing, what is the fair-price relation for a bond future? Apply the Series IV fixed-income convention while selecting the correct response.

Q70.For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 3 carry income, why may bond futures often trade below spot clean price? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q71.For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 3 fra position, what is a forward rate agreement from the borrower’s rate perspective? Select the most accurate fixed-income derivatives interpretation.

Q72.In an Indian ETIRD compliance and settlement case, focusing on chapter 3 current settlement, what is the current settlement mode of exchange-traded GOI bond futures described in the March 2026 workbook? Choose the answer that best fits the interest-rate-derivatives exam context.

Q73.For a debt portfolio manager concerned about rate movements, focusing on chapter 3 current settlement, what is the current settlement mode of 91-day T-bill futures? Apply the Series IV fixed-income convention while selecting the correct response.

Q74.In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 current settlement, what is the current settlement mode of Overnight MIBOR futures? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q75.For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 trading hours, what is the regular trading time for listed IRF products stated in the workbook? Use the Indian exchange-traded interest-rate derivatives framework.

Q76.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 3 price band, what is the price band for cash-settled GOI bond futures? Select the most accurate fixed-income derivatives interpretation.

Q77.For a clearing and settlement case in interest-rate derivatives focusing on chapter 3 price band, what operating range applies to 91-day T-bill futures? Choose the answer that best fits the interest-rate-derivatives exam context.

Q78.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 3 price band, what operating range applies to Overnight MIBOR futures? Apply the Series IV fixed-income convention while selecting the correct response.

Q79.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 3 daily settlement, what is daily settlement price normally based on for a liquid IRF contract? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q80.During a Series IV mock exam case on exchange-traded interest-rate derivatives, focusing on chapter 3 theoretical price, what is used when the required closing-trade data are unavailable? Use the Indian exchange-traded interest-rate derivatives framework.

Q81.For a fixed-income dealer reviewing yield, basis, and margin risk, focusing on chapter 3 open interest, what is open interest? Select the most accurate fixed-income derivatives interpretation.

Q82.In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 3 open interest, what does a new buyer and new seller generally do to open interest? Choose the answer that best fits the interest-rate-derivatives exam context.

Q83.For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 3 irf vs fra, what is the main advantage of IRF over an FRA? Apply the Series IV fixed-income convention while selecting the correct response.

Q84.In an Indian ETIRD compliance and settlement case, focusing on chapter 3 hedge limitations, what is a limitation of standardized IRF for hedging? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q85.For a debt portfolio manager concerned about rate movements, focusing on chapter 3 expectancy model, what is expectancy-model pricing? Use the Indian exchange-traded interest-rate derivatives framework.

Q86.In a Series IV question focused on fixed-income market mechanics, focusing on chapter 3 short selling, why is short selling relevant to cash-and-carry pricing? Select the most accurate fixed-income derivatives interpretation.

Q87.For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 3 calendar spread, what does a calendar spread in IRF combine? Choose the answer that best fits the interest-rate-derivatives exam context.

Q88.In a short-term rate benchmark and MIBOR futures scenario, focusing on chapter 3 price discovery, what is price discovery in IRF? Apply the Series IV fixed-income convention while selecting the correct response.

Q89.For a clearing and settlement case in interest-rate derivatives focusing on chapter 3 futures margin, why are both sides of futures margined? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

Q90.In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 3 mtm, what does mark-to-market accomplish? Use the Indian exchange-traded interest-rate derivatives framework.

Q91.For a treasury desk hedging duration with bond futures or MIBOR futures, focusing on chapter 3 closing position, what happens to an IRF position closed by an exact opposite trade? Select the most accurate fixed-income derivatives interpretation.

Q92.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.