n NISM Certifications
VII NISM Series VII
Medium

Stock Exchanges shall ensure that brokers are mandatorily put in risk-reduction mode when _____ of their collateral available for margin adjustment gets utilized.

Practice question from NISM Series VII Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    95%

  2. 90%

    Correct answer

  3. C

    85%

  4. D

    75%

Why this is the answer

When 90% of a broker’s collateral is utilized, exchanges must automatically place the broker in risk-reduction mode. This restricts new orders and cancels all unexecuted ones to prevent excessive risk exposure.

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