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NISM Demo Questions

Get a glimpse of our premium question bank. Practice these highly-curated demo questions to boost your NISM preparation and identify your weak spots.

Sample Question Bank

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.

+1-0.25
MCQ
A
The combination helps distinguish fresh positioning from position closure
B
Open interest alone fixes the next settlement price
C
Price change is irrelevant in derivatives
D
The two figures must always move in the same direction
NISM-Series-IVchapter-6market-datadifficulty-2

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.

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MCQ
A
Dealer
B
Authorised Person
C
Corporate Manager
D
Branch Manager
NISM-Series-IVchapter-6user-hierarchydifficulty-1

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.

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MCQ
A
Issuing PAN numbers to clients
B
Defining exposure limits for branches
C
Viewing only the user's own trades
D
Clearing trades through a clearing bank
NISM-Series-IVchapter-6user-hierarchydifficulty-2

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.

+1-0.25
MCQ
A
As a combined option portfolio across scenarios, not as unrelated positions
B
Margin only the profitable leg
C
Ignore the long call completely
D
Use only the underlying's face value
NISM-Series-Ichapter-7spandifficulty-2

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.

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MCQ
A
Derivatives are expressly included within securities
B
Every future payment is a government security
C
Only instruments carrying voting rights are securities
D
All private commercial agreements are listed securities
NISM-Series-IVchapter-8scradifficulty-1

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.

+1-0.25
MCQ
A
It replaces transaction monitoring
B
Client identity, address, ownership, and risk circumstances may change
C
Option contracts never expire
D
It recalculates index values
NISM-Series-IVchapter-10kycdifficulty-1

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.

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MCQ
A
The recommendation is unsuitable for the client's risk profile and objective
B
The option has an expiry date
C
The trade uses an exchange
D
The client has completed KYC
NISM-Series-IVchapter-10sales-practicesdifficulty-1

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.

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MCQ
A
Promise a minimum return
B
Ask only which stock the client likes
C
Ignore potential losses
D
Assess the client's objectives, financial capacity, knowledge, and risk tolerance
NISM-Series-IVchapter-10sales-practicesdifficulty-1

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.

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MCQ
A
Select profitable trades automatically
B
Replace risk disclosure
C
Establish and verify the client's identity and relevant profile
D
Guarantee the client's creditworthiness
NISM-Series-IVchapter-10kycdifficulty-1

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.

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MCQ
A
It guarantees tax exemption
B
It acts as a key unique identifier for securities-market relationships and reporting
C
It is an option contract code
D
It fixes the client's margin rate
NISM-Series-IVchapter-10kycdifficulty-1

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.

+1-0.25
MCQ
A
FIFO, LIFO, and average cost
B
Fair value hedge, cash flow hedge, and hedge of a net investment in a foreign operation
C
Cash, spot, and forward
D
Call, put, and futures
NISM-Series-IVchapter-9hedge-accountingdifficulty-2

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.

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MCQ
A
A hedge of exposure to changes in fair value attributable to a specified risk
B
A tax set-off
C
A margin deposit
D
A hedge only of future salary
NISM-Series-IVchapter-9fair-value-hedgedifficulty-2

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.

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MCQ
A
A hedge of exposure to variability in cash flows attributable to a specified risk
B
A bond auction
C
A hedge of clean price only
D
A default waterfall
NISM-Series-IVchapter-9cash-flow-hedgedifficulty-2

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.

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MCQ
A
Only physical settlement
B
Formal designation, documentation, and effectiveness assessment as applicable
C
No identified risk
D
A guaranteed profit
NISM-Series-IVchapter-9hedge-documentationdifficulty-2

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.

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MCQ
A
Nowhere
B
Share capital
C
Other comprehensive income subject to applicable standards
D
Salary expense
NISM-Series-IVchapter-9ocidifficulty-2

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.

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MCQ
A
Client margin
B
Share capital
C
Profit or loss as required by the applicable standard
D
Ignored permanently
NISM-Series-IVchapter-9ineffectivenessdifficulty-2

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.

+1-0.25
MCQ
A
Guaranteed income
B
Immediate salary expense
C
A deposit or asset according to its nature, not automatically an expense
D
Share capital
NISM-Series-IVchapter-9margin-accountingdifficulty-2

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.

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MCQ
A
As an amount relating to the derivative asset, subject to subsequent accounting
B
As margin income
C
As zero
D
As bond face value
NISM-Series-IVchapter-9option-accountingdifficulty-2

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.

+1-0.25
MCQ
A
Only dealer names
B
Risk-management policies, exposures, accounting policies, and relevant fair values
C
Only coupons
D
No information
NISM-Series-IVchapter-9disclosuredifficulty-2

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.

+1-0.25
MCQ
A
Business income
B
Salary income
C
Agricultural income
D
Lottery income
NISM-Series-IVchapter-9tax-classificationdifficulty-2

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.

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MCQ
A
Non-speculative business income
B
Salary income
C
Agricultural income
D
Lottery income
NISM-Series-IVchapter-9tax-classificationdifficulty-1

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.

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MCQ
A
It determines the futures lot size
B
It removes the need to file a return
C
It affects the income against which the loss may be set off and carried forward
D
It changes the option strike
NISM-Series-IVchapter-9tax-classificationdifficulty-2

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.

+1-0.25
MCQ
A
All derivatives are tax-free
B
They are physically settled
C
They have no profit or loss
D
The Income-tax Act provides an exclusion when prescribed recognized-exchange conditions are met
NISM-Series-IVchapter-9non-speculativedifficulty-2

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.

+1-0.25
MCQ
A
Capital gains subject to law
B
Income from other sources subject to law
C
Salary income
D
Eligible business income
NISM-Series-IVchapter-9loss-setoffdifficulty-2

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.

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MCQ
A
Indefinitely without conditions
B
Three years
C
Eight assessment years
D
One year
NISM-Series-IVchapter-9loss-carry-forwarddifficulty-2

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.

+1-0.25
MCQ
A
Late filing always preserves it
B
Only an exchange statement is required
C
The return should be filed within the prescribed due date, subject to law
D
No return is needed
NISM-Series-IVchapter-9tax-filingdifficulty-2

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.

+1-0.25
MCQ
A
It can affect books, audit applicability, and tax reporting
B
It sets MIBOR
C
It fixes option delta
D
It replaces income
NISM-Series-IVchapter-9turnoverdifficulty-2

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.

+1-0.25
MCQ
A
Notional value is always zero
B
Only margin is legal tender
C
Tax turnover methods focus on trading differences/premiums under applicable guidance rather than gross underlying notional
D
Futures have no quantity
NISM-Series-IVchapter-9turnoverdifficulty-3

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.

+1-0.25
MCQ
A
Yes, always
B
Tax rules set fair value
C
Neither applies to IRD
D
No, they arise under different standards and laws
NISM-Series-IVchapter-9accounting-vs-taxdifficulty-2

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.

+1-0.25
MCQ
A
INR 100
B
INR 0.005
C
INR 10
D
INR 5
NISM-Series-IVchapter-3bond-futures-tickdifficulty-2

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.

+1-0.25
MCQ
A
INR 7.5
B
INR 150
C
INR 0.0075
D
INR 15
NISM-Series-IVchapter-3bond-futures-tickdifficulty-2

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.

+1-0.25
MCQ
A
INR 1,99,728
B
INR 49,438
C
INR 1,97,750
D
INR 1,91,000
NISM-Series-IVchapter-3tbill-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 5
B
INR 102.75
C
INR 411
D
INR 1.25
NISM-Series-IVchapter-3bond-futures-tickdifficulty-2

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.

+1-0.25
MCQ
A
INR 98,813
B
INR 3,81,000
C
INR 3,95,250
D
INR 3,99,203
NISM-Series-IVchapter-3tbill-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 5,70,000
B
INR 5,98,425
C
INR 5,92,500
D
INR 1,48,125
NISM-Series-IVchapter-3tbill-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
The buyer's tax rate
B
Premium received initially minus premium paid to close, adjusted for costs
C
The underlying's face value
D
Only initial margin
NISM-Series-IVchapter-9options-accountingdifficulty-1

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.

+1-0.25
MCQ
A
Recognition of the favorable exercise settlement receipt
B
Delivery of index units
C
A new margin pledge
D
Cancellation of all prior MTM
NISM-Series-IVchapter-9exercise-accountingdifficulty-2

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.

+1-0.25
MCQ
A
A purchase of index units
B
A dividend receivable
C
No further entry
D
The adverse exercise settlement payment as a loss
NISM-Series-IVchapter-9exercise-accountingdifficulty-2

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.

+1-0.25
MCQ
A
Other income subject to applicable rules
B
Salary income
C
Eligible non-speculative business income
D
House-property income subject to applicable rules
NISM-Series-IVchapter-9tax-lossdifficulty-2

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.

+1-0.25
MCQ
A
Brokerage and exchange transaction charges incurred for the business
B
Personal vacation expenses
C
Cost of a private residence unrelated to trading
D
A family member's school fees
NISM-Series-IVchapter-9tax-expensedifficulty-1

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.

+1-0.25
MCQ
A
Both are always non-refundable expenses
B
Neither affects accounting
C
Premium is consideration for the option, while margin is collateral for performance risk
D
Both are always income
NISM-Series-IVchapter-9accounting-controlsdifficulty-2

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.

+1-0.25
MCQ
A
Share capital of the broker
B
The MTM gain and the resulting receivable/deposit balance separately and transparently
C
No gain because cash was not withdrawn
D
A new option purchase
NISM-Series-IVchapter-9accounting-controlsdifficulty-2

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.

+1-0.25
MCQ
A
Use tax law only
B
Ignore the regulator
C
Follow the applicable regulator’s requirements
D
Record no derivative
NISM-Series-IVchapter-9regulated-entitydifficulty-2

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.

+1-0.25
MCQ
A
It determines coupons
B
It guarantees profit
C
It replaces audit
D
It supports reliable fair values and prevents unchecked trader marks
NISM-Series-IVchapter-9valuation-controldifficulty-2

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.

+1-0.25
MCQ
A
Ignore all losses
B
Use face value only
C
Apply the relevant accounting standard consistently without selectively anticipating gains
D
Recognize every expected gain immediately regardless of standards
NISM-Series-IVchapter-9prudencedifficulty-2

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.

+1-0.25
MCQ
A
Only banks may mention returns
B
Derivatives always generate losses
C
Risk and expected return are linked, and derivatives cannot eliminate all investment risk
D
All high-return products are illegal
NISM-Series-IVchapter-10sales-practicesdifficulty-1

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.

+1-0.25
MCQ
A
Explain trading risks and broker-client rights and obligations before participation
B
Guarantee recovery of all trading losses
C
Replace KYC and account-opening forms
D
Predict exact market prices
NISM-Series-IVchapter-10risk-disclosuredifficulty-1

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.

+1-0.25
MCQ
A
Leverage guarantees profit
B
Margin equals the full contract value
C
Leverage removes volatility
D
A small margin can control a much larger exposure, magnifying gains and losses
NISM-Series-IVchapter-10risk-disclosuredifficulty-1

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.

+1-0.25
MCQ
A
Every contract has unlimited buyers
B
Liquidity affects only dividends
C
A position may not be closable promptly at a reasonable price
D
The exchange never publishes prices
NISM-Series-IVchapter-10risk-disclosuredifficulty-1

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.

+1-0.25
MCQ
A
INR 6,57,600
B
INR 16,440
C
INR 1,64,400
D
INR 1,644
NISM-Series-IVchapter-3mibor-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 5,54,850
B
INR 5,549
C
INR 22,19,400
D
INR 55,485
NISM-Series-IVchapter-3mibor-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 10,275
B
INR 1,02,750
C
INR 41,10,000
D
INR 10,27,500
NISM-Series-IVchapter-3mibor-contract-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 822
B
INR 205.5
C
INR 51.375
D
INR 411
NISM-Series-IVchapter-3mibor-tick-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 411
B
INR 102.75
C
INR 822
D
INR 1644
NISM-Series-IVchapter-3mibor-tick-valuedifficulty-3

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.

+1-0.25
MCQ
A
INR 2466
B
INR 616.5
C
INR 154.125
D
INR 1233
NISM-Series-IVchapter-3mibor-tick-valuedifficulty-3

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.

+1-0.25
MCQ
A
6.205%
B
0.7%
C
5.5%
D
5.15%
NISM-Series-IVchapter-3forward-ratedifficulty-3

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.

+1-0.25
MCQ
A
6.455%
B
0.75%
C
5.325%
D
5.7%
NISM-Series-IVchapter-3forward-ratedifficulty-3

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.

+1-0.25
MCQ
A
0.8%
B
6.706%
C
5.9%
D
5.5%
NISM-Series-IVchapter-3forward-ratedifficulty-3

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.

+1-0.25
MCQ
A
It converts into a loan
B
It is unaffected by bond price
C
It generally gains because bond prices rise
D
It necessarily loses
NISM-Series-IVchapter-3bond-price-ratedifficulty-2

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.

+1-0.25
MCQ
A
It receives the coupon automatically
B
It necessarily loses
C
It generally gains because bond prices fall
D
It becomes a call option
NISM-Series-IVchapter-3bond-price-ratedifficulty-2

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.

+1-0.25
MCQ
A
Bond futures are quoted as interest rates
B
Both always gain when yields fall
C
MIBOR futures have no rate exposure
D
It gains from a rise in the quoted MIBOR rate, whereas a long bond future generally gains when yields fall
NISM-Series-IVchapter-3mibor-directiondifficulty-2

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.

+1-0.25
MCQ
A
100 units
B
2,000 units, corresponding to face value INR 2 lakh
C
INR 5 crore of interest
D
10,000 units
NISM-Series-IVchapter-3bond-futures-lotdifficulty-2

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.

+1-0.25
MCQ
A
Directly as accrued interest
B
Only as face value
C
As MIBOR plus spread
D
100 minus the futures discount yield
NISM-Series-IVchapter-3tbill-quotationdifficulty-2

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.

+1-0.25
MCQ
A
INR 102.75
B
INR 5
C
INR 1.25
D
INR 411
NISM-Series-IVchapter-3tbill-tickdifficulty-2

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.

+1-0.25
MCQ
A
INR 5 crore for one month on a 30/365 basis
B
INR 2 lakh of bonds
C
INR 1 crore for one year
D
INR 50 lakh for one day
NISM-Series-IVchapter-3mibor-notionaldifficulty-2

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.

+1-0.25
MCQ
A
The annual coupon of a GOI security
B
The simple average of applicable daily FBIL Overnight MIBOR for the contract month
C
The highest policy repo rate
D
The last bond trade only
NISM-Series-IVchapter-3mibor-settlementdifficulty-2

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.

+1-0.25
MCQ
A
Clean price minus accrued interest
B
Coupon minus yield
C
Spot price minus futures price
D
Futures price minus spot price only
NISM-Series-IVchapter-3basisdifficulty-2

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.

+1-0.25
MCQ
A
Margins become zero
B
Coupons disappear permanently
C
The yield curve must flatten
D
Futures and spot refer to the same underlying value at the same time
NISM-Series-IVchapter-3basis-convergencedifficulty-2

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.

+1-0.25
MCQ
A
Cash price minus all accrued interest only
B
Coupon divided by duration
C
Face value plus margin
D
Cash price plus financing cost minus income on the cash position
NISM-Series-IVchapter-3bond-futures-pricingdifficulty-2

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.

+1-0.25
MCQ
A
Income earned on the bond can exceed financing cost
B
Bond prices and futures are unrelated
C
The exchange fixes a discount
D
Margins are deducted from price
NISM-Series-IVchapter-3carry-incomedifficulty-2

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.

+1-0.25
MCQ
A
The borrower is short every bond
B
No party has rate exposure
C
The lender is always long bond price
D
The borrower is long the reference interest rate
NISM-Series-IVchapter-3fra-positiondifficulty-2

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.

+1-0.25
MCQ
A
Settlement in unrelated non-debt assets
B
Cash settlement
C
Mandatory physical delivery
D
Delivery at seller option
NISM-Series-IVchapter-3current-settlementdifficulty-2

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.

+1-0.25
MCQ
A
No settlement
B
Delivery of corporate bonds
C
Mandatory T-bill delivery
D
Cash settlement
NISM-Series-IVchapter-3current-settlementdifficulty-2

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.

+1-0.25
MCQ
A
Cash settlement
B
Physical delivery of deposits
C
Delivery of GOI bonds
D
Settlement through coupons only
NISM-Series-IVchapter-3current-settlementdifficulty-2

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.

+1-0.25
MCQ
A
Twenty-four hours daily
B
Weekends only
C
Monday to Friday, 9:00 a.m. to 5:00 p.m.
D
9:00 a.m. to 3:30 p.m. only
NISM-Series-IVchapter-3trading-hoursdifficulty-2

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.

+1-0.25
MCQ
A
Plus or minus 5% of rate
B
No order controls
C
Plus or minus 1% only
D
Plus or minus 3% of base price, subject to prescribed relaxation
NISM-Series-IVchapter-3price-banddifficulty-2

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.

+1-0.25
MCQ
A
One tick only
B
Plus or minus 5%
C
Plus or minus 3%
D
Plus or minus 1% of base price
NISM-Series-IVchapter-3price-banddifficulty-2

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.

+1-0.25
MCQ
A
Plus or minus 1%
B
Plus or minus 5% of base rate
C
No range
D
Plus or minus 3% of bond price
NISM-Series-IVchapter-3price-banddifficulty-2

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.

+1-0.25
MCQ
A
The highest bid of the day
B
The prescribed volume-weighted average of recent trades
C
The annual coupon
D
The client’s entry price
NISM-Series-IVchapter-3daily-settlementdifficulty-2

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.

+1-0.25
MCQ
A
The previous coupon
B
A published theoretical-price methodology
C
Zero
D
The highest margin
NISM-Series-IVchapter-3theoretical-pricedifficulty-2

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.

+1-0.25
MCQ
A
The number of trades ever executed
B
Outstanding contracts not yet closed or finally settled
C
Only long positions
D
Daily trading volume
NISM-Series-IVchapter-3open-interestdifficulty-2

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.

+1-0.25
MCQ
A
Leave it always unchanged
B
Increase it by one contract
C
Increase it by two contracts
D
Reduce it by one
NISM-Series-IVchapter-3open-interestdifficulty-2

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.

+1-0.25
MCQ
A
Guaranteed hedge effectiveness
B
No margining
C
Perfect customization
D
Exchange transparency and central clearing reduce bilateral counterparty exposure
NISM-Series-IVchapter-3irf-vs-fradifficulty-2

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.

+1-0.25
MCQ
A
No prices are visible
B
It cannot be traded before expiry
C
Only banks can observe it
D
Lot size and expiry may not exactly match the exposure
NISM-Series-IVchapter-3hedge-limitationsdifficulty-2

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.

+1-0.25
MCQ
A
Only financing cost matters
B
The futures price reflects the market’s expected future spot value
C
Futures must equal current spot plus coupon
D
The exchange fixes every future price
NISM-Series-IVchapter-3expectancy-modeldifficulty-2

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.

+1-0.25
MCQ
A
It determines coupon frequency
B
It removes all basis risk
C
Reverse arbitrage may require borrowing and selling the underlying
D
It sets position limits
NISM-Series-IVchapter-3short-sellingdifficulty-2

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.

+1-0.25
MCQ
A
Two cash bonds only
B
A bond and an equity option
C
Two identical long positions
D
Opposite positions in different expiries on the same underlying
NISM-Series-IVchapter-3calendar-spreaddifficulty-2

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.

+1-0.25
MCQ
A
Prices remain private
B
Competitive trading reveals market expectations about rates and bond values
C
RBI fixes every trade price
D
Only issuers quote prices
NISM-Series-IVchapter-3price-discoverydifficulty-2

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.

+1-0.25
MCQ
A
Margin is the purchase price
B
Only buyers face risk
C
Either long or short can incur losses as price or rate moves
D
Margin guarantees profit
NISM-Series-IVchapter-3futures-margindifficulty-2

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.

+1-0.25
MCQ
A
It changes bond coupons
B
It creates accrued interest
C
It removes position limits
D
It settles daily gains and losses against the latest settlement value
NISM-Series-IVchapter-3mtmdifficulty-2

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.

+1-0.25
MCQ
A
Both contracts require delivery
B
The net open position is reduced or eliminated
C
Open interest must double for the trader
D
The original trade is deleted
NISM-Series-IVchapter-3closing-positiondifficulty-2

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.

+1-0.25
MCQ
A
The obligation to buy the underlying at the spot price
B
The obligation to sell the underlying at the futures price
C
The right to buy the underlying at the strike price
D
The right to sell the underlying at the strike price
NISM-Series-IVchapter-4call-putdifficulty-1

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.

+1-0.25
MCQ
A
The right to buy the underlying at the strike price
B
The obligation to sell the underlying at the spot price
C
The right to sell the underlying at the strike price
D
The obligation to buy the underlying at the futures price
NISM-Series-IVchapter-4call-putdifficulty-1

In an interest-rate options scenario involving GOI bond price exposure, focusing on chapter 4 terminology, which party receives the option premium when an option is created? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

+1-0.25
MCQ
A
The clearing bank
B
The issuer of the underlying share
C
The option writer
D
The option holder
NISM-Series-IVchapter-4terminologydifficulty-1

For a bank treasury comparing cash bonds, futures, and swaps, focusing on chapter 4 terminology, in option-market terminology, who is the holder? Use the Indian exchange-traded interest-rate derivatives framework.

+1-0.25
MCQ
A
The option seller
B
The clearing member only
C
The market maker only
D
The option buyer
NISM-Series-IVchapter-4terminologydifficulty-1

For a risk manager using listed interest-rate derivatives for rate exposure, focusing on chapter 4 terminology, what is the strike price of an option? Answer as a GOI bond, T-bill, or MIBOR derivatives participant would.

+1-0.25
MCQ
A
The closing price of the underlying on trade date
B
The daily settlement price of a futures contract
C
The premium paid for the option
D
The predetermined price at which the underlying may be bought or sold on exercise
NISM-Series-IVchapter-4terminologydifficulty-1

In an Indian ETIRD compliance and settlement case, focusing on chapter 4 rights obligations, which statement correctly distinguishes an option buyer from an option writer? Select the most accurate fixed-income derivatives interpretation.

+1-0.25
MCQ
A
The buyer has a right; the writer has a contingent obligation
B
Both have unconditional obligations
C
The buyer has an obligation; the writer has only a right
D
Both have only rights
NISM-Series-IVchapter-4rights-obligationsdifficulty-1

For a clearing and settlement case in interest-rate derivatives focusing on chapter 4 rights obligations, an option holder chooses not to exercise an unfavourable option. Which contractual feature permits this? Select the most accurate fixed-income derivatives interpretation.

+1-0.25
MCQ
A
The premium is refunded automatically
B
The holder has a right without an obligation
C
The writer may cancel every losing trade
D
The strike price changes to spot
NISM-Series-IVchapter-4rights-obligationsdifficulty-1

In a Series IV interest-rate derivatives case for a GOI securities portfolio, focusing on chapter 4 rights obligations, when a call holder exercises, what obligation does the call writer face? Choose the answer that best fits the interest-rate-derivatives exam context.

+1-0.25
MCQ
A
To sell or otherwise settle the underlying exposure at the strike terms
B
To buy the underlying at the strike
C
To refund the premium only
D
To choose a new expiry date
NISM-Series-IVchapter-4rights-obligationsdifficulty-2

For a debt portfolio manager concerned about rate movements, focusing on chapter 4 exercise style, a European-style option may be exercised when? Choose the answer that best fits the interest-rate-derivatives exam context.

+1-0.25
MCQ
A
At any time before or on expiry
B
Only on the trade date
C
Only after the expiry date
D
Only on its expiry date
NISM-Series-IVchapter-4exercise-styledifficulty-1

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