Practice Set - 2 | Practice Set | NISM Series XVI: Commodity Derivatives Certification Examination

Question 1

Which participant benefits from mispricing?

Question 2

If arbitrage opportunities persist for long, market is:

Question 3

A hedger avoids derivatives and faces full price risk. This shows:

Question 4

A trader hedges exposure but incorrect timing causes loss. This highlights:

Question 5

If speculators dominate market, hedgers may face:

Question 6

If a hedger ignores basis changes, the hedge becomes:

Question 7

A hedger uses futures but closes early. Risk outcome is:

Question 8

Which participant stabilizes price differences across markets?

Question 9

A speculator uses leverage and faces sudden loss despite correct prediction later. Reason is:

Question 10

A trader hedges correctly but loses due to currency fluctuation. This shows:

Question 11

A hedger locks price but market moves favorably afterward. The result is:

Question 12

Which scenario represents over-hedging?

Question 13

A trader profits only when volatility increases, not direction. This is:

Question 14

If a trader hedges wrong direction, outcome is:

Question 15

If arbitrage profit exists but cannot be executed, reason may be:

Question 16

Which strategy ensures profit regardless of price movement?

Question 17

A trader hedges but market becomes highly volatile. Result is:

Question 18

If market is perfectly efficient, arbitrage opportunities:

Question 19

A speculator consistently profits without predicting direction. This suggests:

Question 20

A trader takes risk without underlying exposure expecting profit. This is:

Question 21

A farmer hedges crop price using futures but still faces loss due to mismatch in contract size. This is an example of:

Question 22

Which scenario is most complex for decision-making?

Question 23

A trader hedges using different commodity contracts. Risk outcome is:

Question 24

A trader enters both futures and spot markets to exploit price difference but fails due to high transaction cost. This indicates:

Question 25

Which scenario leads to under-hedging?

Question 26

A trader uses derivatives incorrectly and increases exposure. This is:

Question 27

A trader profits from small consistent price differences repeatedly. This is:

Question 28

Which condition reduces arbitrage profitability?

Question 29

Which situation creates false arbitrage signals?

Question 30

Practice Set - 2