n NISM Certifications
NSM General NISM
Medium

How is the premium settled for exchange-traded interest rate option contracts?

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

Options

  1. Cash settled

    Correct answer

  2. B

    Adjusted to liquid assets

  3. C

    Both

  4. D

    None

Why this is the answer

Premiums are settled in cash.

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