ECONOMICS (CBSE/UGC NET)

ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Circuit breakers are triggered when index rises/fall by
A
10%, 12%, 15%
B
10%, 15%, 20%
C
5%, 10%, 15%
D
10%, 12%, 20%
Explanation: 

Detailed explanation-1: -If an index jumps or falls 10 percent, 15 percent, or 20 percent, the circuit breaker is triggered, followed by a coordinated trading halt in all equity and equity derivative markets nationwide.

Detailed explanation-2: -Circuit breakers are temporary measures that halt trading to curb panic-selling on stock exchanges. U.S. regulations have three levels of a circuit breaker, which are set to halt trading when the S&P 500 Index drops 7%, 13%, and 20%.

Detailed explanation-3: -The circuit breaker system raises a red flag when an index either dips or rises by 10%, 15% and 20%. When this happens, trading is halted not just in equity markets, but also in the derivatives markets in India. The halt can be for a few minutes or it might last for the remainder of the trading day.

Detailed explanation-4: -Circuit breakers halt trading on the nation’s stock markets during dramatic drops and are set at 7%, 13%, and 20% of the closing price for the previous day. The circuit breakers are calculated daily.

There is 1 question to complete.