Question

Q13. Consider the following statements about Concentration margin:

1. A concentration margin would be levied on individuals and institutions whose exposure account for a major chunk of the total exposure in that respective equity or commodity derivative contract.

2. Concentration margin is a normal practice in many exchanges globally.

Which of the statements are correct?

• A. a) 1 only
• B. b) 2 only
• C. c) Both 1 and 2
• D. d) None of the above

Answer 1

The correct option is C

c) Both 1 and 2

• A concentration margin would be levied on individuals and institutions whose exposure account for a major chunk of the total exposure in that respective equity or commodity derivative contract.
• Incidentally, ‘concentration margin’ is a normal practice in many exchanges globally, including the NASDAQ.