n NISM Certifications
VII NISM Series VII
Medium

While calculating the IMPACT COST of securities traded on the stock exchange, it shall be the percentage price movement caused by an order size of Rs _____ from the average of the best bid and offer price in the order book snapshot.

Practice question from NISM Series VII Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    50,000

  2. 1 lakh

    Correct answer

  3. C

    2.5 lakhs

  4. D

    5 lakhs

Why this is the answer

Impact cost is the percentage price movement caused by an order size of Rs. 1 lakh from the average of the best bid and offer price. Snapshots are taken four times a day from the order book over six months to calculate mean impact cost for both buy and sell sides.

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