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NISM Certifications · NISM-Series-XV: Research Analyst · Terminology in Equity and Debt Markets

A stock closed at Rs 400 on Monday and Rs 440 on Tuesday. The stock is subject to a 10% price band. On Wednesday, the highest price at which it can trade (upper circuit) is:

The upper circuit is Rs 484. Price bands are computed on the previous day's closing price, which is Rs 440, and a 10% band gives 440 x 1.10 = Rs 484 as the maximum allowed trading price on Wednesday.

  1. ARs 440
  2. BRs 480
  3. CRs 484Correct
  4. DRs 444

Explanation

The band is applied on the previous close, which is Rs 440 (Tuesday). Upper limit = 440 x 1.10 = Rs 484. Rs 480 wrongly uses Monday's close of 400 plus 20%, and Rs 440 ignores the band.

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