Practice Set - 1 | Practice Set | NISM Series XVI: Commodity Derivatives Certification Examination

Question 1

Which participant ensures price alignment across markets?

Question 2

Speculation adds depth to markets.

Question 3

Which is true for arbitrage?

Question 4

Commodity derivatives help farmers by:

Question 5

A trader buys commodity expecting price rise without underlying exposure. This is:

Question 6

Which of the following is NOT a use of commodity derivatives?

Question 7

A trader hedges only part of exposure. Risk becomes:

Question 8

A trader profits from price differences between two exchanges. This is:

Question 9

Which participant benefits from price stability?

Question 10

A trader executes an arbitrage strategy but earns no profit despite correct identification of price differences. What is the most likely reason?

Question 11

If speculators dominate market, volatility may:

Question 12

A speculator expects falling prices and sells futures. This is:

Question 13

If speculators exit market, liquidity will:

Question 14

Which participant is least concerned with price direction?

Question 15

Commodity derivatives help in price discovery.

Question 16

Arbitrage opportunities exist when:

Question 17

Speculators in commodity markets:

Question 18

Which participant benefits from volatility?

Question 19

Commodity derivatives improve market efficiency.

Question 20

A trader profits without directional exposure. This is:

Question 21

Which participant absorbs risk from hedgers?

Question 22

A refinery locks crude oil prices using derivatives. This is:

Question 23

Which scenario creates most confusion for hedgers?

Question 24

If arbitrage opportunities disappear quickly, market is:

Question 25

Which activity depends heavily on accurate prediction?

Question 26

If arbitrage opportunity exists, market is:

Question 27

The primary purpose of commodity derivatives is:

Question 28

A perfect hedge requires:

Question 29

If hedger does opposite position in derivatives, it is called:

Question 30

Commodity derivatives markets improve:

Question 31

Which participant reduces price volatility indirectly?

Question 32

If a hedger uses incorrect contract size, risk becomes:

Question 33

Commodity derivatives reduce uncertainty for producers.

Question 34

Speculators increase market liquidity.

Question 35

A trader simultaneously buys low and sells high across markets. This is:

Question 36

A jeweler uses futures to lock gold prices. This is:

Question 37

Hedging completely eliminates risk.

Question 38

Arbitrage involves:

Question 39

A farmer uses futures contracts to protect against falling prices. This is an example of:

Question 40

Practice Set - 1