n NISM Certifications
VII NISM Series VII
Medium

SPAN margining uses VaR but improves upon it by generating ______ “what-if” scenarios.

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

Options

  1. A

    8

  2. B

    10

  3. C

    14

  4. 16

    Correct answer

Why this is the answer

SPAN calculates worst-case potential loss using 16 “what-if” scenarios based on price and volatility changes, determining initial margin requirements.

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