n NISM Certifications
VIII NISM Series VIII
Medium

Mr. Ashish had purchased 25 PUT options on a stock X by paying a premium of Rs 20 per put (strike price of Rs 180). The stock price has closed at Rs 240 on the exercise date. In such a situation. Mr. Ashish will choose to _____ .

Practice question from NISM Series VIII - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Exercise the option

  2. Not to exercise the option

    Correct answer

  3. C

    Exercise the option but should decline giving delivery of the underlying

  4. D

    Exercise the option as he likes the company X and its management

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

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