n NISM Certifications
VII NISM Series VII
Medium

Which of the following are functions of a Clearing Corporation?

Practice question from NISM Series VII Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To clear and settle all transactions executed in the stock markets

  2. B

    To provide risk management functions

  3. C

    To provide financial guarantee for all contracts executed in the stock market

  4. All of the above

    Correct answer

Why this is the answer

A Clearing Corporation performs key roles — (1) Clearing and settling all market transactions, (2) Providing risk management, and (3) Acting as a central counterparty by guaranteeing settlement (novation).

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NISM Series VII Mock Test 4