n NISM Certifications
NSM General NISM
Medium

____________ are the maximum exposure levels which the entire market and each trading member or investor can go up to.

Practice question from NISM Series IV - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Position limits

    Correct answer

  2. B

    Open interest

  3. C

    Value at Risk

  4. D

    Price bands

Why this is the answer

Position limits restrict the maximum number of derivative contracts held to prevent excessive market risk and manipulation.

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