NISM Certifications · NISM-Series-VIII: Equity Derivatives · Legal and Regulatory Environment
A trading member's client has a futures position on which the exchange has levied an initial margin of Rs 1,20,000. The client has deposited Rs 1,50,000 with the member. Later the position suffers an MTM loss of Rs 45,000 that is debited to the client. Ignoring other charges, what is the surplus of the deposit over the initial margin requirement after the debit?
There is a Rs 15,000 shortfall. After the MTM loss of Rs 45,000 the deposit falls from Rs 1,50,000 to Rs 1,05,000, which is below the Rs 1,20,000 initial margin requirement by Rs 15,000, so the client must top up.
- ARs 30,000 surplus
- BRs 15,000 shortfallCorrect
- CRs 15,000 surplus
- DRs 75,000 surplus
Explanation
Deposit after the MTM debit is 1,50,000 - 45,000 = Rs 1,05,000. The requirement is Rs 1,20,000, so there is a shortfall of 1,20,000 - 1,05,000 = Rs 15,000. Rs 30,000 is the surplus before the MTM debit.
Did you get it right without looking?
One question tells you little. A timed set on Legal and Regulatory Environment shows your real accuracy, how long you take and where you lose marks.
More Legal and Regulatory Environment questions
- Under SEBI's rules on derivatives contracts, which feature applies to stock options and stock futures that are physically settled in India?
- Under the securities laws governing the Indian equity derivatives market, which body prescribes the eligibility criteria for stocks to be ad…
- Which of the following best describes the role of a Compliance Officer at a trading member in the equity derivatives segment?
- Which of the following statements about the position limits and disclosure regime for derivatives in India is most accurate?
- Which of the following is a feature of the SEBI-prescribed risk management framework for index and stock derivatives?
- A trading member wishes to be admitted to the equity derivatives segment of an exchange. Which of the following is a correct statement about…