📊 NISM Series V-D Chapter 21 of 22 ⚖ 6 of 150 marks weightage

Ch.21: Exchange Traded Interest Rate Options

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 21: Exchange Traded Interest Rate Options — covering option basics and terminology, option styles (European/American/Bermudan), moneyness, intrinsic/time value, the five option pricing parameters, all five Option Greeks (Delta, Gamma, Theta, Vega, Rho) with worked numerical examples, Put-Call Parity, option pricing models (Binomial, Black-Scholes, Black 1976), Implied Volatility, payoff diagrams for long/short calls and puts, contract specifications for Exchange Traded Interest Rate Options, and market indicators (Open Interest, Put-Call Ratio). Carries 6 out of 150 marks. The exam has 150 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Option terminology (strike price, premium, expiration, exercise), the three option styles (European, American, Bermudan), and the three moneyness states (ITM, ATM, OTM)
Intrinsic value vs. time value, the five parameters affecting option price, and all five Option Greeks (Delta, Gamma, Theta, Vega, Rho) with their worked-example calculations
Put-Call Parity, option pricing models (Binomial, Black-Scholes, Black 1976 used for Indian exchange-traded IRO) and Implied Volatility as the market's consensus volatility estimate
Payoff diagrams and break-even points for long call, short call, long put and short put positions on Interest Rate Options
Contract specifications for Exchange Traded Interest Rate Options (lot size, strike intervals, expiry, settlement), Exchange-Traded vs. OTC IRO comparison, and market indicators — Open Interest interpretation and the Put-Call Ratio (PCR)

Key Terms:Strike PriceOption PremiumIntrinsic ValueTime ValueDeltaGammaThetaVegaRhoPut-Call Ratio (PCR)

Free Sample Question

Q1MCQMediumOption Greeks — Rho

Which option position type has positive Rho, meaning its price generally rises as interest rates increase?

APut options

✓Call options

CBoth calls and puts equally

DNeither calls nor puts are affected by Rho

💡 Call options generally rise in price as interest rates increase (positive Rho), while put options generally decrease in price as interest rates increase (negative Rho).

50 more questions in this chapter

The full V-D question bank (900+ questions across all 22 chapters, with explanations) is included in the ₹199 mock pack and the notes PDF. Try the free full-length mock first, no login needed.

Start the free V-D mock Get notes and question bank

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 21: Exchange Traded Interest Rate Options with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 24, 2026.

NISM SERIES V-D

Practice the full Series V-D question bank.

22 chapters, 150 marks, 60% pass, negative marking. Take the free mock test or get the complete study pack.

Try the Free V-D Mock Test →

✓ Unlock the 8 full mocks (₹199), pass the real NISM exam, and get your ₹199 back in your UPI. Conditions apply

← Ch.20: Exchange Traded Interest Rate Futures Ch.22: Strategies using Interest Rate Derivatives →