The Exchange is not permitted to adjust the reference price.

The Exchange is not permitted to adjust the reference price.

• A. True
• B. False
• C. It depends on conditions
• D. Not applicable

Answer: (B)

The reference price is a benchmark used to gauge intraday moves and to apply price limits, so exchanges adjust it when necessary to keep trading orderly and the price history consistent. Adjustments occur in defined situations, such as corporate actions (stock splits, dividends, mergers) or to correct anomalies, ensuring continuity in the price series. Because these adjustments are permitted under the rules, the statement that the exchange is not permitted to adjust the reference price isn’t correct. When no such events occur, the reference price typically stays the same.

The reference price is a benchmark used to gauge intraday moves and to apply price limits, so exchanges adjust it when necessary to keep trading orderly and the price history consistent. Adjustments occur in defined situations, such as corporate actions (stock splits, dividends, mergers) or to correct anomalies, ensuring continuity in the price series. Because these adjustments are permitted under the rules, the statement that the exchange is not permitted to adjust the reference price isn’t correct. When no such events occur, the reference price typically stays the same.