n NISM Certifications
VII NISM Series VII
Medium

In case of declaration of an "extraordinary" dividend by a company, the total dividend amount is ______ from all the strike prices of the option contracts on that stock.

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

Options

  1. Reduced

    Correct answer

  2. B

    Divided

  3. C

    Multiplied

  4. D

    Added

Why this is the answer

When an extraordinary dividend is declared, the total dividend amount is reduced from all strike prices of options on that stock, with revised strike prices applicable from the ex-dividend date.

Test yourself for real

Take a full NISM Series VII mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.