n NISM Certifications
VII NISM Series VII
Medium

For securities on which no price bands are applicable, stock exchanges use a mechanism called _______.

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

Options

  1. A

    Quantity Limit per Order

  2. B

    Circuit Filters

  3. C

    Trading Restrictions

  4. Dynamic Price Bands

    Correct answer

Why this is the answer

Dynamic price bands, generally set at 10% of the previous closing price, prevent orders from being placed beyond reasonable price limits. These apply to stocks and indices on which derivatives are available.

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NISM Series VII Mock Test 2