n NISM Certifications
VII NISM Series VII
Medium

While calculating the Mark to Market (MTM) loss, the clearing corporation squares off the positions and calculates the actual loss – True or False?

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

Options

  1. A

    True

  2. False

    Correct answer

Why this is the answer

MTM calculates notional/unrealized loss or profit based on changes in market value. Squaring off positions refers to closing them, which is not part of MTM.

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