n NISM Certifications
X NISM Series X
Medium

Trading derivatives on a stock exchange exposes the trader to which risk primarily?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Counterparty risk

  2. Price risk

    Correct answer

  3. C

    Operational risk

  4. D

    All of the above

Why this is the answer

On a stock exchange, the central counterparty mitigates counterparty risk; traders mainly face price risk due to market movements.

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