n NISM Certifications
VII NISM Series VII
Medium

The VAR margin covers losses up to one day for liquid stocks – True or False?

Practice question from NISM Series VII Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. True

    Correct answer

  2. B

    False

Why this is the answer

VaR margin covers potential losses for 99% of trading days. For liquid stocks, it covers one-day losses; for illiquid stocks, it covers three days to allow time for liquidation.

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