n NISM Certifications
X NISM Series X
Medium

When lending securities, what amount must a borrower deposit upfront?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    100% of lending price

  2. B

    Extreme loss margin

  3. C

    Value-at-risk margin

  4. All of the above

    Correct answer

Why this is the answer

Borrowers must deposit multiple margins—including 100% of the lending price, risk margins, and loss margins—before borrowing securities, to mitigate risk.

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