n NISM Certifications
VII NISM Series VII
Medium

Futures contracts in the F&O segment are settled on the ______ basis.

Practice question from NISM Series VII Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Physical delivery

  2. B

    Cash settlement

  3. Both physical delivery and cash settlement

    Correct answer

  4. D

    None of the above

Why this is the answer

Futures contracts can be settled either by delivering the underlying asset (physical delivery) or by paying/receiving the difference in cash (cash settlement).

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