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NCFM Commodity Derivatives

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Are private agreements between two parties to exchange cash flow in future according to prearranged formula , They can be regarded as portfolio of forward contracts .

A. BasketsB. WarrantsC. LeapsD. SwapsE. I am not attempting this question

ANSWER: D

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A Call Option gives the Holder the right

A. to buy the underlying assetB. to sell the underlying assetC. to either sell or buy the underlying asset, as he wishesD. None of the aboveE. I am not attempting this question

ANSWER: A

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A future contracts is very standardized contracts that leaves very little (except the price) open to negotiation.

A. FALSEB. TRUEC. Partially trueD. Insufficient informationE. I am not attempting this question

ANSWER: B

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An European Option

A. can be exercised anytime during the life of the OptionB. can be exercised only at maturityC. is traded only on the European ExchangeD. is a floating rate optionE. I am not attempting this question

ANSWER: B

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As more and more ____ trades take place, the difference between spot and futures prices would narrow.

A. ArbitrageB. DeltaC. SpeculativeD. HedgeE. I am not attempting this question

ANSWER: A

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In a business daily to get information about the top gainers in the futures market, one has to look into the heading

A. Open InterestB. Positive trendC. Negative trendD. Contract detailsE. I am not attempting this question

ANSWER: B

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In an option contracts, the option lies with the . . . .

A. buyer B. seller C. BothD. exchange E. I am not attempting this question

ANSWER: A

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Like Futures contracts there is daily settlement of options contracts.

A. depends on the expiryB. TRUEC. FALSED. depends if the option is call or putE. I am not attempting this question

ANSWER: C

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Mark-to-market margins will be collected on a

A. Weekly basisB. every 2 daysC. every 3 daysD. daily basisE. I am not attempting this question

ANSWER: D

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the potential returns on a future positions are

A. limited B. unlimited C. a function of the volatility of the index D. none of the aboveE. I am not attempting this question

ANSWER: B

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