NISM Series VII - Securities Operations and Risk Management Certification Sample Questions:

1. For un-expired illiquid futures contracts on an individual security, how is the Daily Settlement Price determined by the Clearing Corporation?

A) It is the weighted average price of the contract during the last half an hour of trading.
B) It is determined by the FIMMDA / FBIL reference rate.
C)

D) It is fixed at the previous day's settlement price adjusted for the risk-free interest rate.
E) It is based on the closing price of the underlying security in the Capital Market Segment.

2. SEBI has introduced the mechanism of Net Settlement of cash segment and F&O segment upon expiry of stock derivatives. Under which of the following conditions is this benefit of netting (merged settlements) specifically available to an investor?

A) When the investor uses different Clearing Members for Cash and F&O segments but they are interoperable.
B) When the investor is a Portfolio Manager (PMS) directed to enter into delivery backed transactions only.
C) When the investor trades in highly correlated indices across different exchanges.
D) When the investor is an Institutional Investor (including FPIs) whose transactions are backed by delivery.
E) When the investor trades and clears through the same Trading Member (TM) - Clearing Member (CM) combination in both Cash and F&O segments.

3. Regarding participation in the International Financial Services Centres (IFSC), which of the following categories of resident investors is eligible to deal in securities listed in IFSC?

A) Only resident corporate entities with a net worth exceeding Rs. 100 Crore.
B) Residents are strictly prohibited from dealing in securities listed in IFSC.
C) Any resident individual irrespective of investment limit.
D) A person resident in India eligible under FEMA to invest funds offshore, to the extent allowed under the Liberalized Remittance Scheme (LRS).
E) Only resident Qualified Institutional Buyers (QIBs).

4. When a company announces a Bonus Issue in the ratio of A:B, specific adjustments are made to the Strike Price, Market Lot, and Position of Equity F&O contracts. Which of the following formulas correctly represents the Adjustment Factor used for these calculations?

A) (A * B) / (A + B)
B) A / (A + B)
C) (A - B) / B
D) B / (A + B)
E) (A + B) / B

5. Under the SEBI (Prohibition of Insider Trading) Regulations, 2015, which of the following parties is deemed to be a 'Connected Person' unless the contrary is established?

A) An individual who has never held a position in the company.
B) A banker of the company.
C) A vendor supplying office stationery on a one-off basis.
D) A shareholder holding 5% interest in the company.
E) A former employee who left the company 12 months prior to the act.

Solutions: