NCFM Commodity derivatives certification Question Bank for examination preparation

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2. 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. Baskets
B. Warrants
C. Leaps
D. Swaps
E. I am not attempting this question
ANSWER: D
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3. A Call Option gives the Holder the right
A. to buy the underlying asset
B. to sell the underlying asset
C. to either sell or buy the underlying asset, as he wishes
D. None of the above
E. I am not attempting this question
ANSWER: A
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4. A future contracts is very standardized contracts that leaves very
little (except the price) open to negotiation.
A. FALSE
B. TRUE
C. Partially true
D. Insufficient information
E. I am not attempting this question
ANSWER: B
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5. An European Option
A. can be exercised anytime during the life of the Option
B. can be exercised only at maturity
C. is traded only on the European Exchange
D. is a floating rate option
E. I am not attempting this question
ANSWER: B
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6. As more and more ____ trades take place, the difference
between spot and futures prices would narrow.
A. Arbitrage
B. Delta
C. Speculative
D. Hedge
E. I am not attempting this question
ANSWER: A
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7. In a business daily to get information about the top gainers in
the futures market, one has to look into the heading
A. Open Interest
B. Positive trend
C. Negative trend
D. Contract details
E. I am not attempting this question
ANSWER: B
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8. In an option contracts, the option lies with the . . . .
A. buyer
B. seller
C. Both
D. exchange
E. I am not attempting this question
ANSWER: A
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9. Like Futures contracts there is daily settlement of options
contracts.
A. depends on the expiry
B. TRUE
C. FALSE
D. depends if the option is call or put
E. I am not attempting this question
ANSWER: C
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10. Mark-to-market margins will be collected on a
A. Weekly basis
B. every 2 days
C. every 3 days
D. daily basis
E. I am not attempting this question
ANSWER: D
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11. 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 above
E. I am not attempting this question
ANSWER: B
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