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NISM Series XVI: Commodity Derivative Certification (Set 2)

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NISM Series XVI: Commodity Derivative Certification (Set 2)

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1.

In the contract specification for castor seed futures contract, the quality specification for oil is mentioned as follows:
• From 45 percent to 47 percent accepted at discount of 1:2 or part thereof,
• Below 45 percent rejected
If the contracted price of castor seeds is Rs 6000 per ton with a quality specification of 47 percent, and on actual delivery, the quality content is found to be 46 percent, then the price payable is __________

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2. ________ facilitates efficient price discovery.

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3. Who does the clearing and settlement of trades of a Trading cum Clearing?

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4. The Time Priority of an order will not change _______ .

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5. Which category of membership entitles a member to execute trades on his own account as well as for his clients and also to clear and settle trades executed by himself as well as of his clients?

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6. What is ‘Mandi’ with respect to commodity markets?

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7. ___________ gives SEBI the jurisdiction over stock exchanges / commodity exchanges through recognition and supervision and also gives SEBI the jurisdiction over contracts in securities and listing of securities on such exchanges.

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8. In the _______ option strategy, the trader sells a call and a put with same expiry dates but with different strike prices.

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9. __________ are those who buy first and expect the price to increase from current level.

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10. Identify the true statement with respect to ‘Trading Member’.

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11. The cost of 10 grams of gold in the spot market is Rs 40,000/- and the cost-of-carry is 12% per annum, the fair value of a 4-month futures contract will be

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12. Mr. Amit has entered in a forward contract to sell 1000 kgs of Cotton to Mr. Ketan at Rs. 100 per kg for delivery after 3 months. To save on storage costs, Mr. Amit does not buy any physical cotton immediately. Mr. Amit is confident of a fall in cotton prices in the next three months and wants to profit from it. However he also wants to avoid the risk of a price rise. Which option strategy should Mr. Amit use?

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13. Which type of orders remain passive and enter the exchange system only when the trigger price is breached?

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14. Which type of strategy is adopted to benefit the trader when the near-month contract is over priced or the far-month contract is under priced and the trader of the above strategy sells the near-month contract and buys the far-month contract when the spread is not fair and squares off the positions when the spread corrects and the contracts are traded at fair spread ?

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15. _________ can be generated because of the benefit from ownership of a physical asset

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16. ________ measures the sensitivity of the option value to a given small change in the price of the underlying asset.

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17. Fair Value of the Futures Contract = Spot Price + ________.

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18. Which of these is an option strategy for a person who has commodity selling requirement in the near future?

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19. ________ is defined as trading in financial instruments where a computer algorithm automatically determines individual parameters of orders such as initiation of order, timing, price or quantity, managing the order post submission with / without limited human intervention.

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20. Identify the true statement with respect to the relation between Strike Price and Option Premium. (Assume all other factors remain the same)

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21. In case of a ______ , the buyer of the option contract has a right to exercise it.

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22. The extra margin applied to all open positions once they enter the tender period (usually the last 5-10 days before the expiry date of the contract) is known as ______ .

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23. ________ is a part of Goods and Service s Tax (GST) structure.

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24. Arvind has a physical exposure of 500 kilograms to the underlying commodity and the lot size of the futures contract on this underlying is 10 kilograms. The hedge ratio between the spot and futures price is 0.80. Calculate how many futures contract he should trade to set up an optimal hedge?

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25. On expiry, option series having strike price closest to the Daily Settlement Price (DSP) of Futures shall be termed as ________ option series.

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26. Which of these spreads are implemented by buying and selling options with the same strike price but different expiry months?

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27. Why does Contango like situation happen in Agricultural commodities?

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28. As per the SEBI guidelines for brokers with respect to execution of clients orders. the broker should _______ .

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29. Calculate the Tick Value of a Silver Futures contract if the Quotation factor for Silver is ‘Rupees per 1 Kilogram’, lot size for regular Silver contract = 40 kg and tick size is Rs. 1.

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30. Which ratio indicates the number of lots/contracts that the hedger is required to buy or sell in the futures market to cover his risk exposure in the physical / spot market?

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31. Which of the following is NOT correct about Grievance Redressal Committee(GRC)?

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32. Which of these has the highest weightage in the MCX’s iCOMDEX Composite index for 2022 ?

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33. Commodity price and its Future price may turn negative due to technical, fundamental and speculative factors. Whether Option on Goods can be priced negative?

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34. A _______ is entitled to execute trades on his own account as well as for his clients and also to clear and settle trades executed by himself as well as of his clients.

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35. 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, ________.

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36. With each passing day, the cost of carry of a futures contract _______.

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37. In _______ system, goods were exchanged between two parties with matching and opposite needs.

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38. As per SEBI Regulations, _________ can be used by Warehouse Service Providers (WSP) for storing goods which are meant for settlement of trades on the Exchanges.

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39. National Commodity & Derivatives Exchange Limited (NCDEX) primarily trades in ______ commodity derivatives.

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40. Due to some reason, if the underlying prices go into negative zone (below zero), then technically, which of these prices can also go into negative?

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41. A commodity owner is interested in selling the commodity. In which case would he/she be better off ‘selling the commodity in the futures market’ rather than ‘selling the commodity in the spot market’? (ignore convenience yield)?

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42. The difference between the spot and the futures price is known as _____ .

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43. Why are indices constructed?

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44. Price discovery is basically the process of determining commodity price through ____ .

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45. When should the broker inform the client about execution of a trade?

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46. As per the Institute of Chartered Accountants of India (ICAI) guidelines, derivatives that are intended for trading or speculative purposes should be reflected in the balance sheet as ______ .

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47. The time decay of options is measured by _____.

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48. Which of these fees / taxes is NOT applicable in case of commodity derivatives?

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49. A _______ can be accredited with more than one Clearing Corporation but the same ______ cannot be utilized by more than one Clearing Corporation for the same commodity.

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50. The cost of 1 kg Silver in the spot market is Rs 58,000. The cost-of-carry is 6% per annum. Calculate the theoretical fair value of a 4 month futures contract.

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