n NISM Certifications
XIII NISM Series XIII
Medium

Identify the correct statement with respect to a short position in a PUT option.

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

Options

  1. A

    Short position in a put option can be closed out by executing a long position in a put option with any exercise date and exercise price.

  2. Short position in a put option can be closed out by executing a long position in a put option with the same exercise date and exercise price.

    Correct answer

  3. C

    Short position in a put option can be closed out by executing a short position in a call option with the same exercise date and exercise price.

  4. D

    Short position in a put option can be closed out by executing a long position in a call option with the same exercise date and exercise price.

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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