n NISM Certifications
VII NISM Series VII
Medium

Mark-to-market (MTM) losses or gains in derivatives are settled _______.

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

Options

  1. A

    Weekly

  2. B

    Monthly

  3. Daily

    Correct answer

  4. D

    Quarterly

Why this is the answer

MTM ensures that gains or losses on derivative positions are realized daily, reducing counterparty risk.

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