n NISM Certifications
VII NISM Series VII
Medium

When does the delivery of the underlying instrument and cash settlement in derivatives trading occur?

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

Options

  1. A

    After expiration

  2. B

    After premature exercise

  3. Both 1 and 2

    Correct answer

  4. D

    None of the above

Why this is the answer

Delivery of the underlying instrument or cash settlement can happen either after expiration or after premature exercise of the derivative.

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