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NISM Series VII - Securities Operations and Risk Management Certification Sample Questions:
1. Periodic settlement of running accounts is mandatory for most clients. However, under which of the following specific circumstances is the periodic settlement of funds **NOT** necessary to the extent of funds involved?
A) For clients who have a credit balance of less than Rs. 10,000.
B) For clients trading in the derivatives segment with open positions, even if they have excess free cash.
C) For High Net Worth Individuals (HNIs) who have provided a 'Do Not Settle' instruction.
D) For Non-Resident Indian (NRI) clients dealing through the Portfolio Investment Scheme (PIS).
E) For clients availing Margin Trading Facility (MTF), to the extent of funds/securities relating to MTF used by the client.
2. The relationship between a Depository Participant (DP) and a Depository is governed by an agreement. According to the regulatory norms, where is the form of this agreement specified?
A) In the bye-laws of the Depository
B) In the Securities Contracts (Regulation) Rules, 1957
C) In the SEBI (Stock Brokers) Regulations, 1992
D) In the Master Circular for Depositories issued by RBI
E) In the Articles of Association of the Depository Participant
3. In the Capital Market / Equity Segment, how is the **Mark to Market (MTM)** margin collected from a clearing member regarding their proprietary and client positions?
A) Gross of all net positions across all clients; no set-off of loss of one client with the profit of another client.
B) Collected only if the MTM loss exceeds 10% of the VaR margin collected.
C) Netted across all clients; if the Broker has a net profit across all clients, no margin is collected.
D) Netted at the security level across all clients and proprietary account combined.
E) Gross of all open positions; however, proprietary positions can be netted against client positions.
4. The Money Market in India comprises various segments based on the tenor and type of instrument. Which of the following statements correctly describe the features of these segments/instruments? (Select all that apply)
A) Commercial Papers (CPs) can be issued for maturities exceeding 1 year.
B) Call Money market is meant for overnight lending and borrowing.
C) Term Money market involves lending and borrowing for a period between 15 days and 1 year.
D) Notice Money market involves lending and borrowing for a period between 2 days and 14 days.
E) Certificate of Deposits (CDs) issued by All India Financial Institutions can have a maturity period not less than 1 year and not exceeding 3 years.
5. A Trading Member executes the following trades in a specific scrip on a given day:
* Buy 500 shares @ Rs. 100
* Sell 300 shares @ Rs. 105
* Buy 200 shares @ Rs. 95
What are the final Net Quantity and Net Fund obligations for the member to be settled with the Clearing Corporation?
A) Net Qty: 0; Net Funds: Receive Rs. 1,500
B) Net Qty: 400 (Receive); Net Funds: Pay Rs. 37,500
C) Net Qty: 400 (Deliver); Net Funds: Receive Rs. 37,500
D) Net Qty: 400 (Receive); Net Funds: Pay Rs. 69,000
E) Net Qty: 1000 (Receive); Net Funds: Pay Rs. 100,500
Solutions:
| Question # 1 Answer: E | Question # 2 Answer: A | Question # 3 Answer: A | Question # 4 Answer: B,C,D,E | Question # 5 Answer: B |








