n NISM Certifications
VII NISM Series VII
Medium

In derivatives, extreme loss margin is collected to:

Practice question from NISM Series VII Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Cover normal trading losses

  2. Cover unexpected market movement losses

    Correct answer

  3. C

    Reduce brokerage fees

  4. D

    None of the above

Why this is the answer

Extreme loss margin protects against extraordinary losses that could arise from sudden market volatility.

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NISM Series VII Mock Test 5