Terminology in Equity and Debt Markets
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Question 1 of 3Practice · Series XV — Research Analyst
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Learn these topics
More units in NISM Series XV
- Introduction to Research Analyst Profession2
- Introduction to Securities Market3
- Fundamentals of Research7
- Economic Analysis7
- Industry Analysis12
- Company Analysis – Business and Governance9
- Company Analysis – Financial Analysis16
- Corporate Actions7
- Valuation Principles13
- Fundamental analysis of commodities9
- Fundamentals of Risk and Return10
- Qualities of a Good Research Report7
- Legal and Regulatory Environment15
- Technical Analysis22
- Case Study - Valuation8
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | Not published by NISM |
NISM Series XV Research Analyst
Exam rules read on NISM's site on 3 October 2026. Exam pattern revised on 20 January 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 3 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
All 3 questions on Terminology in Equity and Debt Markets, with answers
Q1A bond with face value ₹1,000 pays an annual coupon of ₹90 and currently trades at ₹900. Its current yield is:
Option A. 9%
Why it is wrong: 9% is the coupon rate on face value.
Option B. 10% — Correct answer
Option C. 11.1%
Why it is wrong: This does not follow from annual coupon divided by market price.
Option D. 12%
Why it is wrong: It is not supported by the inputs.
Answer: B. Current yield = Annual coupon ÷ Current market price = ₹90 ÷ ₹900 = 10%. Current yield is not the same as yield to maturity because it ignores the capital gain or loss to redemption and timing of all cash flows. Remember: Coupon rate uses face value. Current yield uses current market price.
Hint, shown before you answer in practice mode: Common mistake: Using the coupon rate as the current yield when the bond trades away from par.
XV-068mediumnumerical
Q2Which feature is most characteristic of a zero-coupon bond?
Option A. Its coupon rate resets every month in line with market interest rates
Why it is wrong: That describes a floating-rate feature, not a zero coupon.
Option B. It automatically converts into the issuer’s equity shares at maturity
Why it is wrong: Conversion is a feature of convertible securities, not all zero-coupon bonds.
Option C. It pays no coupon and is bought at a discount to its maturity value — Correct answer
Option D. It has no maturity value, so the investor gets nothing back at the end
Why it is wrong: Zero-coupon bonds still have a redemption/maturity value.
Answer: C. A zero-coupon bond does not make periodic coupon payments. The investor’s return generally arises from the difference between the purchase price and the redemption amount at maturity. Remember: Zero coupon describes the absence of periodic interest payments, not the absence of return.
Hint, shown before you answer in practice mode: Common mistake: Assuming “zero coupon” means “zero return.”.
XV-069easyconceptual
Q3Two otherwise comparable bonds have the same yield, but Bond A has a materially higher duration than Bond B. For a small parallel rise in yields, which statement is generally correct?
Option A. Bond A is guaranteed to rise in price as market yields go up
Why it is wrong: Bond prices generally move inversely to yields. A rise in yield does not guarantee a price rise.
Option B. Bond B must default first, because its duration is much lower than Bond A’s
Why it is wrong: Duration does not determine default order.
Option C. Duration is unrelated to a bond’s sensitivity to interest-rate changes
Why it is wrong: Interest-rate sensitivity is a core use of duration.
Option D. Bond A’s price should move more than Bond B’s in percentage terms — Correct answer
Answer: D. Duration is a measure of a bond’s sensitivity to changes in yield, subject to the usual approximation limits. A higher duration generally implies a larger percentage price change for a given small change in yield, all else equal. Remember: Higher duration generally means greater price sensitivity to interest-rate movements.
Hint, shown before you answer in practice mode: Common mistake: Confusing duration with maturity alone or with credit risk.
XV-070hardconceptual
Terminology in Equity and Debt Markets: common questions
How many practice questions are there on Terminology in Equity and Debt Markets?
3 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 16 practice topics for NISM Series XV, which has 150 questions in total.
Are these real NISM Series XV questions on Terminology in Equity and Debt Markets?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
Does negative marking apply to NISM Series XV?
Yes. NISM takes off 25% of a question's marks for a wrong answer. On a 1-mark question that is 0.25 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. Timed practice here uses the same rule.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
Fundamentals of Research
7 questions on Fundamentals of Research. Its quiz opens on that unit.
Open Fundamentals of Research