n NISM Certifications
VII NISM Series VII
Medium

In case of bonus issues or similar corporate actions, if the adjustment factor results in fractions, the strike price and market lot are ________ as decided by the relevant authority.

Practice question from NISM Series VII Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Ignored

  2. Rounded off

    Correct answer

  3. C

    Increased

  4. D

    Decreased

Why this is the answer

To minimize fraction settlements, the position value is first computed before adjustment and then with the exact adjustment factor, followed by rounding off the strike price and market lot, and recomputing the position value; any difference is adjusted by the relevant authority, avoiding forced closure of positions.

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