n NISM Certifications
VII NISM Series VII
Medium

The term ‘circuit breaker’ in the stock market refers to _______.

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

Options

  1. A trading halt mechanism

    Correct answer

  2. B

    A type of derivative

  3. C

    Dividend adjustment

  4. D

    Demat account freeze

Why this is the answer

Circuit breakers prevent extreme market volatility by temporarily halting trading when index movements exceed preset limits.

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