📊 NISM Series V-D Chapter 19 of 22 ⚖ 2 of 150 marks weightage

Ch.19: Interest Rate Derivatives

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 19: Interest Rate Derivatives — covering the definition and economic role of derivatives, the four generic derivative products (forwards/FRAs, futures, options, swaps) applied to interest rates and bonds, growth drivers of the derivatives market, the three types of market participants, the different underlyings of interest rate derivatives, and OTC versus Exchange-Traded derivatives. Carries 2 out of 150 marks — the lowest weight in the series. The exam has 150 MCQs, 60% passing score, and −10% negative marking per wrong answer.

Free sample

Qs in full bank

Exam Marks

60%

Pass Score

-10%

Neg. Marking

What You Will Learn in This Chapter

Definition and key economic functions of derivatives (hedging, price discovery, market efficiency, price stability) and the four risk-management approaches: speculation, hedging, insurance, diversification
The four generic interest rate derivative products — Forward Rate Agreements (FRAs) and Bond Forwards, Interest Rate Futures, Interest Rate Options (caps, floors, collars) and Interest Rate Swaps/Swaptions
Growth drivers behind the derivatives market's expansion, and why interest rate derivatives are the largest asset class globally by notional outstanding
The three types of market participants — Hedgers, Speculators/Traders and Arbitragers — and their distinct roles in the Interest Rate Derivatives market
The different underlyings of interest rate derivatives (interest rate, notional bond, single bond, fixed income index) and the key differences between OTC and Exchange-Traded Derivatives

Key Terms:Forward Rate Agreement (FRA)Interest Rate SwapSwaptionInterest Rate CapInterest Rate FloorHedgerSpeculatorArbitragerNotional BondCentral Counterparty (CCP)

Practice Questions

28 more questions in this chapter

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About this content: These practice questions are based on the NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination Workbook published by the National Institute of Securities Markets (NISM), Mumbai (March 2026 edition). NISM is a SEBI-established institution. Questions cover Chapter 19: Interest Rate Derivatives with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 24, 2026.

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← Ch.18: Interest Rate Instruments and Fixed Income Markets Ch.20: Exchange Traded Interest Rate Futures →