n NISM Certifications
X NISM Series X
Medium

The highest trading volumes for index futures and options are generally observed in contracts of less than one month, due to liquidity and trading activity preferences.

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Contracts of less than 1 month

    Correct answer

  2. B

    Contracts of more than 3 months

  3. C

    1 year contracts

  4. D

    3 years contracts

Why this is the answer

Short-term contracts, especially those less than a month, tend to have higher liquidity and trading volumes in index derivatives.

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