n NISM Certifications
VII NISM Series VII
Medium

Identify the correct statement(s) about adjustment of dividends in the Futures and Options (F&O) segment. A. The dividend percentage is multiplied in the open positions, B. Adjustments are made for all dividends.

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

Options

  1. A

    Only A is correct

  2. B

    Only B is correct

  3. C

    Both A and B are correct

  4. Neither A nor B is correct

    Correct answer

Why this is the answer

Only extraordinary dividends (over 2% of the market price) lead to adjustments in F&O contracts. The dividend amount is reduced from the strike prices of options, not multiplied or adjusted for ordinary dividends.

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