n NISM Certifications
X NISM Series X
Medium

Which financial instrument is a standardized agreement between two parties to buy or sell an underlying asset at a pre-fixed price?

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

    Forward Contract

  2. Futures Contract

    Correct answer

  3. C

    Swap

  4. D

    Options Contract

Why this is the answer

Futures are standardized, exchange-traded contracts that obligate the buyer and seller to transact an underlying asset at a predetermined price on a future date, with formalized terms defined by the exchange.

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