NISM Series 8 Mock Test 1: Free Equity Derivatives Paper

How this mock is marked

• 50 questions, one mark each.
• 60 minutes on the clock. That is the real exam's pace: 120 minutes for 100 questions.
• A wrong answer loses a quarter of a mark. A blank loses nothing.
• You pass with 60% or more.
• Submit to see your score and the chapters to work on. Then check each right answer and why it is right.

What this paper covers

50 questions from 11 chapters. Each chapter gets a share that follows our question bank.

• Basics of Derivatives: 4 questions.
• Understanding the Index: 2 questions.
• Forwards and Futures: 3 questions.
• Application of Futures: 4 questions.
• Introduction to Options: 7 questions.
• Application of Options: 11 questions.
• Trading Mechanism: 4 questions.
• Clearing, Settlement and Risk Management: 5 questions.
• Legal and Regulatory Environment: 6 questions.
• Accounting and Taxation: 3 questions.
• Sales Practices and Investor Protection: 1 question.

By level: Beginner 8 · Intermediate 32 · Advanced 10.

Chapter split of Mock 1

How Mock 1 shares its questions between chapters and levels. This split belongs to this paper. The other mocks of this exam have their own.

• Basics of Derivatives: Beginner 2 · Intermediate 2 · Advanced 0.
• Understanding the Index: Beginner 1 · Intermediate 1 · Advanced 0.
• Forwards and Futures: Beginner 2 · Intermediate 1 · Advanced 0.
• Application of Futures: Beginner 0 · Intermediate 3 · Advanced 1.
• Introduction to Options: Beginner 1 · Intermediate 5 · Advanced 1.
• Application of Options: Beginner 0 · Intermediate 6 · Advanced 5.
• Trading Mechanism: Beginner 1 · Intermediate 3 · Advanced 0.
• Clearing, Settlement and Risk Management: Beginner 0 · Intermediate 5 · Advanced 0.
• Legal and Regulatory Environment: Beginner 1 · Intermediate 3 · Advanced 2.
• Accounting and Taxation: Beginner 0 · Intermediate 3 · Advanced 0.
• Sales Practices and Investor Protection: Beginner 0 · Intermediate 0 · Advanced 1.

3 sample questions, with answers

These 3 questions are not in Mock 1, so reading them spoils nothing here. They come from Mock 3 of this exam. Each one shows the hint, the answer and why every wrong option is wrong.

1. Q1A trader sells a 24,500 call for 120 points and buys a 24,700 call for 50 points, forming a bear call spread. Ignoring charges, what is the maximum loss per index unit?

   • A

     Option A. 70 points

     Why it is wrong: 70 points is the maximum profit.

   • B

     Option B. 130 points — Correct answer

   • C

     Option C. 120 points

     Why it is wrong: 120 is only the premium received on the short call.

   • D

     Option D. 200 points

     Why it is wrong: The credit reduces the 200-point worst-case intrinsic spread.

   Answer: B. The strike width is 200 points. Net credit is 120 − 50 = 70. Maximum loss = 200 − 70 = 130 points. Remember: Credit-spread risk is capped by the strike width minus the initial credit.

   Hint, shown before you answer in practice mode: Common mistake: Ignoring the long protective call when evaluating the short call's risk.

   VIII-130hardnumerical

   Study this unit

2. Q2Nifty spot is 24,000. Assume no dividends, a simple annual financing rate of 6%, and exactly 30 days to expiry using a 365-day year. Ignoring transaction costs, the theoretical futures value is closest to:

   • A

     Option A. 23,882

     Why it is wrong: This moves the fair value below spot despite a positive financing cost and no dividend benefit.

   • B

     Option B. 24,000

     Why it is wrong: It ignores the financing cost for the 30-day holding period.

   • C

     Option C. 24,360

     Why it is wrong: ₹360 is 1.5% of spot, which is far too much carry for 30 days at 6% annual simple interest.

   • D

     Option D. 24,118 — Correct answer

   Answer: D. With no dividends and simple financing, F ≈ S × [1 + r × (days/365)]. Thus F ≈ 24,000 × [1 + 0.06 × (30/365)] = 24,118.36, so 24,118 is closest. Remember: Under a simple no-dividend cost-of-carry setup, fair futures value is spot plus the financing cost for the remaining time.

   Hint, shown before you answer in practice mode: Common mistake: Applying the full annual interest rate to a contract with only a fraction of a year remaining.

   VIII-013mediumnumerical

   Study this unit

3. Q3With effect from 1 April 2026, what is the STT rate on the sale of an option in securities, applied to the option premium?

   • A

     Option A. 0.01%

     Why it is wrong: 0.01% is not the current option-sale rate.

   • B

     Option B. 0.15% — Correct answer

   • C

     Option C. 0.10%

     Why it is wrong: 0.10% was the immediately preceding option sale rate before the 2026 increase.

   • D

     Option D. 0.05%

     Why it is wrong: 0.05% is the current futures sale rate from 1 April 2026, not the option-premium sale rate.

   Answer: B. The 2026 tax amendment increased STT on the sale of an option in securities to 0.15% of the option premium with effect from 1 April 2026. A separate 0.15% rule applies to the intrinsic-value base when an option is exercised. Remember: From 1 April 2026: option sale STT = 0.15% of premium.

   Hint, shown before you answer in practice mode: Common mistake: Using the futures rate (0.05%) for options.

   VIII-101mediumregulatory

   Study this unit

Then take Mock 2

Read the chapters your result names first. A new paper then shows whether those gaps have closed.