n NISM Certifications
VII NISM Series VII
Medium

For adjustment of a ‘Rights Issue’, the new strike price shall be arrived at by _______ the old strike price by the adjustment factor.

Practice question from NISM Series VII Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Dividing

  2. Multiplying

    Correct answer

  3. C

    Adding

  4. D

    Subtracting

Why this is the answer

In case of a Rights Issue in the equity options segment, the new strike price is calculated by multiplying the old strike price by the adjustment factor as per SEBI’s standard methodology.

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