Practice Set - 3 | Practice Set | NISM Series XVI: Commodity Derivatives Certification Examination

Question 1

In a fixed-for-floating commodity swap, the party paying a fixed price benefits when market prices increase.

Question 2

A trader simultaneously buys in spot and sells in futures to exploit price difference. This is:

Question 3

Which condition is necessary for arbitrage?

Question 4

A market maker is obligated to:

Question 5

Arbitrage opportunities always guarantee profit regardless of transaction costs.

Question 6

Electricity futures contracts involve physical delivery of power.

Question 7

Which participant is most likely to sell futures contracts to hedge against falling prices of finished goods?

Question 8

A hedger aiming to reduce risk completely will always eliminate all exposure.

Question 9

A farmer expecting lower crop prices in the future should ideally take which position?

Question 10

Which of the following correctly matches exposure in a swap?

Question 11

A speculator holding positions overnight for months is classified as:

Question 12

In commodity derivatives, physical delivery is always mandatory.

Question 13

In commodity derivatives, higher interest rates typically lead to:

Question 14

A trader enters into a futures contract expecting prices to rise but exits before expiry without taking delivery. This activity is best classified as:

Question 15

Which factor can simultaneously impact global commodity prices due to political tensions?

Question 16

Currency depreciation in a country generally leads to:

Question 17

A situation where demand exceeds supply and imports are restricted will most likely result in:

Question 18

Commodity prices are influenced more by issuer credibility than supply-demand factors.

Question 19

Which scenario best explains seasonality impact?

Question 20

Practice Set - 3