Are you looking for BSE Futures Quiz On Commodity Derivatives (BSE World Investor Week)? As you know Securities Market Regulator – SEBI, is a member of the International Organization of Securities Commissions (I0SCO).

Every year, the world over, World Investor Week is celebrated under the aegis of I0SCO, in order to give further impetus to the various investor education and awareness initiatives. SEBI has been participating in celebrations along with the exchanges, depositories, investor associations, commodity derivative trainers, resource persons, etc – since 2017.

As a part of this celebration, BSE Investors’ Protection Fund has also planned many activities during this week, and one of them is the quiz. Where participants can win cash prizes just by answering some simple MCQ questions. You can also visit the official page for quiz registration

BSE Quiz On Commodity Derivatives Answers (BSE World Investor Week Solution)

BSE Futures Quiz On Commodity Derivatives Answers

1. On exchange-traded Commodity futures, the prices of commodities are

  1. announced and disseminated continuously
  2. discovered and disseminated at the end of the day
  3. discovered and disseminated at regular time interval
  4. discovered and disseminated from time to time

2. Hedging is price risk management mechanism that is used by a large number of stakeholders who have

  1. little or no exposure to physical commodity
  2. an exposure to the financial market
  3. an exposure to the physical commodity
  4. none of these

3. In an efficient futures market the spot and futures prices

  1. diverge at the time of expiry of contracts
  2. converge at the time of expiry of contract
  3. converge at the time of squaring off contract
  4. none of these

4. What are the major benefits of futures trading for farmers and farming community?

  1. price instability or increased price unpredictability
  2. stability in the absence of predictable market condition
  3. price fluctuation or increased price unpredictability
  4. to cover price risk against the unpredictable changes in prices

5. Interlinked international commodity market across continents are the drivers of strong and efficient

  1. local market
  2. segmented market
  3. regional market
  4. global market

6. The process of protecting oneself against unpredictable changes in prices by shifting price risk to some one else is called

  1. Arbitraging
  2. hedging
  3. investing
  4. None of these

7. National level multi commodity exchanges like MCX & NCDEX came into existence in

  1. 1999
  2. 2001
  3. 2002
  4. 2003

8. What is deliverable grade?

  1. The standard grade of commodities specified in contract specification, which can be complied while delivering against futures contract
  2. Different varieties of the commodity available in additional delivery centres that can be delivered against futures contract
  3. The varieties that have been specified as AGMARK grade can be deliverable against the futures contract
  4. None of these

9. Please read the given statement and then select the right option as your answer: “Commodity derivatives market is based on principles of perfect competition”

  1. false
  2. partially true
  3. TRUE
  4. Not sure

10. What do you understand by circuit breaker?

  1. It is trading halt of 30 minutes
  2. It is a system of planned trading halt and price limit designed to provide a cooling off period during time of volatility
  3. It is trading halt of 15 minutes without cooling off
  4. It is trading halt of 20 minutes with cooling off

11. Please read the given statement and then select the right option as your answer: “A futures contract is a legally binding agreement between the buyer and the seller, entered on Stock Exchange, to buy or sell a specified amount of an asset, at a certain time in the future, for a price that is agreed today”.

  1. True
  2. partially true
  3. false
  4. Not sure

12. Among these, which does not fall under derivatives contract

  1. ready
  2. futures
  3. forward
  4. option

13. What are the underlying in derivatives contract

  1. commodities
  2. currencies
  3. equities
  4. all the three

14. Please read the given statement and then select the right option as your answer: “A forward contract is a customizable derivative contract between two parties to buy or sell an asset at a specified price on a future date”.

  1. True
  2. partially true
  3. FALSE
  4. Not sure

15. What is basis in derivatives contract

  1. Difference between spot price and futures price is known as the basis
  2. Futures price is equal to spot price
  3. Futures price is more than spot price
  4. Spot price is higher than futures price

16. If spot price of 10g of gold on April 29, 2019 was 22175, Whereas the June 2019 gold futures contracts on MCX was trading at 22265. What is the value of basis?

  1. -90
  2. +110
  3. 80
  4. 85

17. When futures contract approaches maturity , the cost of carry

  1. increases
  2. decreases
  3. remains constant
  4. decreases initially and then increase

18. Supply and demand factors that affect commodity prices include

  1. Production
  2. import &export
  3. Consumption
  4. All the three

19. Technical analysis involves forecasting of futures price movements based on

  1. demand & supply situation
  2. behavioural study of historical price movement
  3. expert analysis of price movements
  4. perception of traders and client

20. Which contract is an agreement between two parties to buy or sell the underlying asset at a future date, at current date’s pre agreed price

  1. Forward
  2. Futures
  3. option
  4. warrant

21. Which contract is an agreement between two parties to buy or sell the underlying asset at a future date, at today’s futures price

  1. Futures
  2. Forward
  3. option
  4. swap

22. Which is not correct concerning futures contract?

  1. entails an obligation rather than an option
  2. contract price is set at the beginning of the contract
  3. gains and losses are recorded at contract expiration
  4. contracts are exchange traded

23. The process of marking futures contract to market means

  1. The profitability of the contract is locked from the onset of the contract
  2. The amount of commodity to be delivered changes as price changes
  3. The profit and losses to be debited/credited daily
  4. The contracts are closed out as soon as they become unprofitable

24. Please read the given statement and then select the right option as your answer: “The seller of a forward contract is obligated to sell the underlying asset when the contract expires”

  1. false
  2. partially true
  3. TRUE
  4. Not sure

25. Margin imposed on both long and short sides over and above the other margins is called

  1. Initial margin
  2. Additional margin
  3. Delivery margin
  4. Special margin

26. Who is required to monitor market abuses such as circular trading , price rigging, and price manipulation according to the self governing regulation requirement

  1. brokerage house
  2. traders association
  3. brokers association
  4. stock exchange

27. Trader Work Station (TWS) is

  1. Offline trading platform to facilitate placing of buy and sell orders
  2. online trading platform to facilitate placing of buy and sell orders
  3. online trading platform to clear buy and sell orders
  4. online trading to facilitate squaring up rates

28. Proprietary trade is denoted by the symbol

  1. INST
  2. OWN
  3. CLI
  4. PRO

29. A type of a order allows one to buy or sell a contract as soon as order is released in the system, if it does not find the match , it is removed from the system

  1. Good Till cancelled order
  2. Day order
  3. Immediate or cancel order
  4. End of session order

30. As against OTC market, commodity derivatives exchange

  1. Guarantees delivery of products in deliverable contracts
  2. Guarantees delivery of product in all contracts
  3. assists in delivery but does not guarantee it
  4. does not guarantee delivery of products

31. Depositors are required to pay to the warehouse owner the applicable charges for

  1. storage and assaying
  2. pest control
  3. insurance
  4. all the three

32. Which among these does the most to reduce default risk for futures contracts

  1. credit checks for both buyer and seller
  2. Flexible delivery arrangement
  3. Marking to market
  4. High liquidity

33. Commodity Index trading is an instrument that derives its value from underlying

  1. Portfolio of commodities
  2. portfolio of physical commodities
  3. portfolio of financial instruments that include commodities
  4. none of these

34. Please read the given statement and then select the right option as your answer: “The convenience yield reflects the market expectations concerning the futures availability of commodity”

  1. false
  2. partially true
  3. TRUE
  4. Not sure

35. What is short hedge?

  1. selling futures contract anticipating price would fall
  2. buying futures contract anticipating price would rise
  3. Simultaneously buying and selling futures contract
  4. Simultaneously buying and selling cash contract

36. What is long hedge?

  1. buying futures contract anticipating price would rise
  2. Simultaneously buying and selling cash contract
  3. selling futures contract anticipating price would rise
  4. selling futures contract anticipating price would fall

37. Who is the regulator for approving contract framework of commodity derivatives contracts to stock exchanges

  1. SEBI
  2. Government of India
  3. Team of Commodity Experts
  4. Niti Ayog

38. Amongst the given options, which one is not correct?

  1. futures contracts are marked to market
  2. Futures contracts allow fewer delivery options than forward contracts
  3. Futures contracts are more liquid than forward contracts
  4. Futures contracts are traded on financial exchange

39. As per SEBI guidelines, each stock exchange is required to accredit warehouses

  1. only Exchange owned
  2. registered by WDRA
  3. owned by WSP
  4. only registered by SEBI

40. Who is responsible to exercise robust mechanism to ensure good delivery

  1. Commission agent
  2. warehouse service provider(WSP)
  3. Clearing corporation
  4. repository

41. Please read the given statement and then select the right option as your answer: “A warehouse service provider can be accredited with more than one exchange”

  1. False
  2. TRUE
  3. partially true
  4. Not sure

42. Under the staggered delivery mechanism , a buyer has to take delivery from prescribed delivery centre —-

  1. On the same day
  2. on the next day
  3. on the expiry date
  4. on T+2 day

43. For a new long futures position taken during the day, if the closing price at the end of the day is lower than his transaction price

  1. The buyer has incurred MTM loss
  2. The Buyer has made MTM gain
  3. Seller has incurred an MTM loss
  4. The seller can ask more premium from buyer

44. For a new short futures position taken during the day, if the closing price at the end of the day is higher than his transaction price

  1. The seller has incurred MTM loss
  2. The seller has made MTM gain
  3. buyer has incurred MTM loss
  4. The buyer can ask more premium from seller

45. Please read the given statement and then select the right option as your answer: “Derivatives markets exert positive influence on the efficiency of the markets of the underlying asset”

  1. false
  2. partially true
  3. TRUE
  4. Not sure

46. Which is a type of risk that is generally faced by the commodity stockists?

  1. Commodity price risk
  2. Seasonality
  3. Geopolitical risk
  4. none of these

47. What is a commodity price index?

  1. It is weighted average of selected commodities
  2. It is simple average of commodities produced in the country
  3. Moving average of selected commodities
  4. moving average of commodities produced in the country

48. Please read the given statement and then select the right option as your answer: “Forward contracts are standardized in nature”

  1. false
  2. TRUE
  3. partially true
  4. Not sure

49. Who are the participants in commodity derivatives trading

  1. farmers/processors
  2. arbitragers
  3. hedgers
  4. All the Three

50. Which one from among the given options, is not basic condition for suitability of commodity for futures trading

  1. large demand and supply
  2. Homogeneity & standardization
  3. No control over supply
  4. government control on prices

51. What purposes are served by the commodity market ecosystem?

  1. logistics
  2. Grading
  3. storing and assaying
  4. all the three

52. Apart from the price risk reduction what are the other benefits of hedging

  1. certainty over the planting cycle
  2. adjust cropping patterns
  3. opt for higher revenue crops
  4. All the three

53. Under which contract, payment and delivery happen immediately?

  1. Ready
  2. Futures
  3. Option
  4. swap

54. Which among the given options, is not a risk parameter covered in the contract specification?

  1. Limit on open position
  2. daily Price fluctuation limit
  3. Additional delivery centre
  4. Initial margin/extreme loss margin

55. From whom spot prices are polled by stock exchanges

  1. Commission agent
  2. physical market yard
  3. market makers
  4. empanelled polling participants

56. What is pay-off?

  1. pay off refers to profit or loss in trade
  2. pay off refers to both profit and loss in trade
  3. Pay off refers to loss
  4. Pay off refers to profit

57. Which is the correct definition of a long position?

  1. When one enters into a contract to buy goods at futures price then it means taking a long position
  2. When one enters into a contract to sell goods at futures price then it means taking a long position
  3. When one enters into a contract to buy goods at current price then it means taking a long position
  4. When one enters into a contract to sell goods at current price then it means taking a long position

58. Which is the correct definition of a short position?

  1. When one enters into a contract to sell goods at futures price then it means taking a short position
  2. When one enters into a contract to buy goods at futures price then it means taking a short position
  3. When one enters into a contract to sell goods at current price then it means taking a short position
  4. When one enters into a contract to buy goods at current price then it means taking a short position

59. What is meant by notified commodities

  1. Central Government has notified commodities in which stock exchanges are permitted to trade in terms of provisions of SCRA
  2. State Government has allowed futures trading in certain metal contract under jurisdiction of state boundary
  3. Certain free commodities
  4. The commodities wherein only TSD/NTSD contracts can be traded

60. How many commodities are currently notified?

  1. 100
  2. 91
  3. 120
  4. 125

61. Please read the given statement and then select the right option as your answer: “Whether it is correct to state that a party with a long position in a futures contract can directly ask the party with the short open position to deliver the underlying asset”

  1. true
  2. partially true
  3. FALSE
  4. Not sure

62. Which among the given options, are examples of tangible assets?

  1. Patent
  2. Trademark
  3. Commodities Bullion/metals/wheat
  4. Brand

63. Among these, who does not participate in commodity derivatives market?

  1. Hedgers
  2. gamblers
  3. Arbitragers
  4. All the three

64. Hedgers are represented by

  1. Day trader
  2. commercial producers, processors, exporters and importers
  3. market maker
  4. Position trader

65. Which among the given options, is the objective of a hedger?

  1. To earn risk less profit
  2. To manage spot market price risk
  3. To take price risk
  4. None of these

66. What is prime objective of arbitrager?

  1. To manage spot market price risk
  2. To earn riskless profit by exploiting price differentials across markets or exchanges
  3. To transfer price risk
  4. None of these

67. Please read the given statement and then select the right option as your answer: “Is the statement futures contracts are not marketable instruments”

  1. true
  2. partially true
  3. FALSE
  4. Not sure

68. Among these, which is not a characteristic of Spot market?

  1. party to party contract/customised
  2. No collateral
  3. Under control of respective state government
  4. serves as risk management tool

69. Among these, which is not a characteristic of commodity derivatives market?

  1. underlying is Standardised as per Exchange specification. Has expiry date
  2. underlying market is fragmented, price opacity
  3. Demat settlement
  4. underlying supply is uncertain, estimated

70. Which among the given options, is not a benefit of commodity derivatives trading?

  1. price risk management
  2. price signal facilitating selling decision
  3. no market access
  4. pledge financing through warehousing and banks network

71. Which among the given options, is a prerequisite for starting trading in commodity derivatives market?

  1. Opening Trading Account with a SEBI registered stock broker and completing the process of Know Your Client (KYC)
  2. Should be trading in physical market
  3. Should have adequate stock in warehouse/designated vault
  4. Should have experience of trading on Regional exchange platform

72. What is trading time of Agri and Agri processed commodities on the stock exchanges?

  1. 9:00 am to 11: 30 pm
  2. 09:00 am to 3:30 pm
  3. 9:00am to 9:00pm
  4. 09:00 am to 5:00 pm

73. What is trading time of non Agri contracts on stock exchanges

  1. 9:00am to 10:30pm /11:50pm
  2. 9:00am to 11:30pm /11:55pm
  3. 9:00am to 10:30pm /11:00pm
  4. 9:00 am to 11:30pm /11:45pm

74. What are the various types of costs associated with trading in commodity derivatives market

  1. Broker charges
  2. Commodity transaction charges
  3. Stock Exchange transaction charges
  4. All the three

75. What is a benchmark price?

  1. It is producing centre price
  2. It is base price for establishing agreed price in a contract
  3. It is main marketing centre price
  4. It is a price disseminated from APMC

76. What is a contract note?

  1. It is evidence of trade done by the stock broker on behalf of the client
  2. It is evidence of trade done by the client
  3. It is evidence of trade done by the stock broker on his own account
  4. It is agreement between the stock broker and the stock exchange

77. What is meant by net bought position?

  1. Long position
  2. Short position
  3. bull spread
  4. bear spread

78. What is meant by net sold position?

  1. Long position
  2. Short position
  3. bull spread
  4. bear spread

79. At time of expiry (due date) the outstanding contracts not settled are

  1. rolled over
  2. cash settled
  3. credit settled
  4. none of these

80. Explain price discovery

  1. Determination of prices of commodity by market forces
  2. Determination of prices of commodity by buyer
  3. Determination of prices of commodity by seller
  4. Determination of prices of commodity by either buyer or seller

81. What benefits are derived from commodity derivatives trading :i) Price discovery ii) Risk Mitigation

  1. only price discovery
  2. only price risk management
  3. both
  4. none of these

82. Would additional margin be levied for deliverable position

  1. No
  2. As per situation
  3. Yes
  4. Not sure

83. What is the need for regulating commodity derivatives market?

  1. To protect and promote the interest of stakeholders and investors
  2. To ensure fairness and transparency in trading
  3. To carry out clearing and settlement functions effectively
  4. all the three

84. Compulsory delivery is recommended so as to

  1. facilitate threat of delivery
  2. increase supply in spot market
  3. increase demand from the end user
  4. promote sharing service

85. What do you achieve by threat of delivery?

  1. The threat of delivery induces the convergence of spot and futures prices through arbitrage process.
  2. The threat of delivery augments supply of the commodity in the spot market
  3. The threat of delivery supports backwardation in futures prices
  4. The threat of delivery supports contango in ready market

86. What is staggered delivery period?

  1. Delivery in phased manner prior to 5 days of the expiry of the contract
  2. Delivery in phased manner prior to 11 days of the expiry of the contract
  3. Delivery in phased manner after 5 days of the expiry of the contract
  4. None of these

87. What types of risk do the participants face in commodity derivatives market

  1. Liquidity risk
  2. Operational risk
  3. credit risk
  4. All the three

88. what is credit risk

  1. Credit risk arises on account of default by counterparty.
  2. Credit risk arises on account of default done by broker member
  3. Credit risk arises on account of default done by client
  4. none of these

89. Why credit risk is almost zero

  1. clearing corporation takes responsibility for the performance of contracts.
  2. Regulator takes the responsibility for the performance of contracts.
  3. Member takes the responsibility for the performance of contracts.
  4. None of these

90. What is market risk

  1. It is the risk of loss on account of adverse movement of price.
  2. Buyer ‘s loss due to rising prices
  3. seller’s loss due to falling prices
  4. loss for both buyer and seller

91. What is liquidity risk

  1. Buyer is unwilling to trade
  2. It is a risk because of which making unwinding of transactions difficult, if the market is illiquid
  3. Seller is unwilling to trade
  4. None of these

92. What is legal risk

  1. Risk on account of uncertainty in the applicability or interpretation of contracts, laws or regulations or due to uncertainty and complexities relating to successful delivery of stocks of specified quality.
  2. Uncertainty about trading norms
  3. uncertainty about WDRA law
  4. none of these

93. What is operational risk

  1. Inadequate corpus to pay settlement obligation
  2. risk arising out of some operational difficulties, like, failure of electricity, transporters strike etc. due to which it becomes difficult to operate in the market.
  3. limited warehouse capacity to store the goods
  4. none of these

94. What are the different types of margins payable on commodity futures

  1. Initial Margin
  2. Extreme loss margin
  3. Special margin /additional margin
  4. tender period/delivery period margin
  5. All the four

95. What is initial margin

  1. It is the amount to be deposited with designated bank before starting to trade
  2. It is the amount to be deposited with the Exchange before starting to trade
  3. It is the amount to be deposited by the market participants in his margin account with Clearing Corporation before they can place order to buy or sell a futures contract.
  4. It is the amount to be deposited with the regulator before start to trade

96. How mark to market is determined

  1. It is determined by taking weekly average
  2. it is determined on the basis of closing prices at the end of each trading day
  3. It is determined by considering two days average futures price
  4. None of these

97. Mark to market is payable by a buyer when

  1. price declines
  2. price rises
  3. price rises as well as falls
  4. none of these

98. Mark to market is payable by a seller when

  1. price declines
  2. price rises
  3. price rises as well as falls
  4. none of these

99. Under whose guidance Investor protection Fund( IPF) has been set up by stock exchanges?

  1. SEBI
  2. RBI
  3. IRDA
  4. Central Government

100. What is purpose of Investor protection Fund

  1. Creating awareness and educating general public and stakeholders about benefit of trading on commodity derivatives market
  2. To fulfil corporate social responsibilities(CSR)
  3. To redress the grievances of the investors
  4. To facilitate buyer against delivery default

101. What is function of Investor protection Fund

  1. To compensate legitimate claims of the investors against defaulting member through whom they trade
  2. To monitor trading activity and protect the interest of the investors
  3. To utilise fund for fulfilling delivery obligation
  4. None of these

102. An arbitration reference for a claim / counter claim above Rs.25 lakh shall be dealt with by

  1. Panel of Clearing corporation
  2. Panel of three arbitrators
  3. Monitoring and surveillance panel of SEBI
  4. None of these

103. Which category of institutional participants from amongst the given options, have been permitted by SEBI to participate in the commodity derivatives market to improve liquidity?

  1. Category III Alternative Investment Funds (AIFs)
  2. Mutual funds & portfolio managers
  3. Eligible Foreign Entities (EFEs) having actual exposure to Indian commodity markets
  4. All the three

104. Who is disseminating daily Settlement Price (DSP) at the end of every trading day

  1. Clearing corporation
  2. Stock Exchange
  3. NERL
  4. SEBI

105. Please read the given statement and then select the right option as your answer: “Mark to market profit or loss is done at daily settlement price”

  1. false
  2. TRUE
  3. partially true
  4. Not sure

106. Please read the given statement and then select the right option as your answer: “The daily profits/losses of the members are settled through using the daily settlement price”

  1. TRUE
  2. FALSE
  3. partially true
  4. Not sure

107. How daily settlement price i.e. closing price is being calculated?

  1. It is calculated on the basis of the last half an hour weighted average price of contract
  2. It is calculated on the basis of the last one hour weighted average price of contract
  3. It is calculated on the basis of the last half an hour of simple average price of contract
  4. It is calculated on the basis of the last one hour of simple average price of contract

108. Please read the given statement and then select the right option as your answer: “Futures contracts are zero sum game”

  1. false
  2. TRUE
  3. partially true
  4. Not sure

109. Why it is said that futures contracts are zero sum game

  1. losses and gains to all positions net out to zero
  2. losses and gains to all positions net out to be negative
  3. losses and gains to all positions net out to be positive
  4. None of these

110. What is meant by convergence in derivatives market

  1. Basis is zero (When the difference between ready and futures price is zero)
  2. Basis is higher
  3. Basis is lower
  4. Basis is higher than actual prices

111. When convergence happens

  1. In the beginning of the running contract
  2. At the contract expiry
  3. Midst of the running contract
  4. After one month duration of running contract

112. When basis is positive

  1. Futures price is higher than spot price
  2. Futures price is equal to spot price
  3. Spot price is higher than futures price
  4. Near month futures is higher than spot price

113. When basis is negative

  1. Near month futures is lower than spot price
  2. Spot price is higher than futures price
  3. Futures price is equal to spot price
  4. Futures price is higher than spot price

114. Who plays role for convergence of spot and futures to happen?

  1. Hedgers
  2. Market maker
  3. Arbitrager
  4. None of these

115. How arbitrager reaps the benefit when futures price is higher than the spot price

  1. Sell and buy from futures market
  2. Sell and buy from spot market
  3. sell in futures market and simultaneously buy from spot market
  4. Buy in futures market and simultaneously sell in spot market

116. How arbitrager reaps the benefit when spot price is higher than the futures price

  1. Sell in spot market and simultaneously buy from futures market
  2. Sell and buy simultaneously from futures market
  3. Sell and buy simultaneously from spot market
  4. sell in futures market and simultaneously buy from spot market

117. Carrying cost involves

  1. insurance
  2. interest
  3. storage cost
  4. All the three

118. How final settlement price (FSP) is arrived at?

  1. The FSP is arrived at by taking the simple average of the last polled spot prices of the last three days viz., E0 (expiry day), E-1 and E-2.
  2. FSP is arrived at by taking simple average of prices of 15 days of basis centre prior to due date
  3. FSP is arrived at by taking simple average of prices of 10 days of additional centres as well as basis centre prior to due date
  4. FSP is arrived at by taking simple average of prices of 5 days of basis centre prior to due date

119. What is delivery/expiry month

  1. It is the specified month in which giving/taking delivery happens
  2. It is the specified month within which a futures contract matures.
  3. It is the specified month in which contracts are offset and residual outstanding position is marked for delivery
  4. None of these

120. What is offset

  1. It refers to exitting the futures market
  2. It refers to liquidation of a futures contract by entering into opposite (purchase or sale, as the case may be) of an identical contract.
  3. It refers to entering into selling transaction for giving delivery intention
  4. It refers to entering into buying transaction for taking delivery

121. What is cash settlement

  1. It is process of performing futures contract by giving delivery through payment of cash
  2. It is process of honouring the futures contract, while dispensing with delivery
  3. It is a process for performing a futures contract by payment of money difference rather than by delivering the physical commodity at the time of maturity of contract.
  4. None of these

122. Please read the given statement and then select the right option as your answer: “Mark to market implies adjusting the margins after every transaction”

  1. FALSE
  2. TRUE
  3. Partially true
  4. Not sure

123. What do you understand by volatility

  1. Estimation of changes in price over given period of time
  2. It is a measurement of the variability rate (but not the direction) of the change in price over a given time period.
  3. measurement daily change in the price trend
  4. None of these

124. Which among the given options, is incorrect regarding role of clearing corporation

  1. collects different types of margins and computes obligations of members
  2. arranges for pay-in and pay-out of funds
  3. assumes the counter-party risk of each member and guarantees financial settlement
  4. facilitates off market transactions

125. What is novation

  1. Stock exchange interposes between buyers and sellers as a legal counterparty
  2. Clearing Corporation becomes buyer to every seller and seller to every buyer
  3. Designated banks interpose between buyers and sellers as a legal counterparty
  4. None of these

126. Which among the given options, is included in the contract note

  1. Birth date of investor
  2. education details of investor
  3. Arbitration clause
  4. bank account details of investor

127. Why unique client code(UCC) is required

  1. It will enable accessing the stock exchange trading details
  2. It will facilitate arbitration opportunities
  3. It will permit to trade on the stock exchange platform
  4. It will help to track trading screen of the stock exchange

128. What is inverted futures market

  1. Near month prices are higher than far month
  2. Near month prices are lower than far month
  3. Near month prices are equal to far month
  4. None of these

129. What is normal futures market

  1. Near month prices are lower than far month prices
  2. Near month prices are higher than far month prices
  3. Near month prices are equal to far month prices
  4. None of these

130. Please read the given statement and then select the right option as your answer: “Low inventories tend to lead to high convenience yield and high inventories tend to lead low convenience yield”

  1. false
  2. TRUE
  3. partially true
  4. Not sure

131. Please read the given statement and then select the right option as your answer: “Mark-to-market ensures financial integrity of the markets”

  1. true
  2. false
  3. partially true
  4. Not sure

Wrap Up

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