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Tuesday, December 20, 2011

Commodity Market Quiz - 4

1. The seller intending to make delivery takes the commodities to ________.
[A]The designated warehouse
[B]The clearing house
[C]The buyer
[D]The exchange



2. _________is the approved custodian for acceptance of Government of India securities under the security deposit requirement.
[A]NSE
[B]NSCCL
[C]NSDL
[D]NCDEX



3. A gold merchant sold twenty units of one-month gold futures contracts at Rs.6000 per 10 gms at the beginning of the day. The unit of trading is 100 gms and each contract is for delivery of one kg of gold. The settlement price at the end of the day was Rs.5950 per 10 gms. The trader's MTM account would show__________.
[A](-)7500
[B](-)10000
[C](+)10000
[D](+)7500



4. Soy oil is the derivative of _______________.
[A]Sunflower seeds
[B]Soybean
[C]CPO
[D]Soy



5. Whenever delivery notices are given by the seller, the ___________ identifies the buyer to whom this notice may be assigned.
[A]The clearing house
[B]The buyer
[C]The exchange
[D]The seller



6. Gold trades in the spot market at Rs.6000 per 10 grams. The fixed charge for storing gold is Rs.310 per deposit upto 500 kgs. And the variable storage costs are Rs.55 per week. Assume that the storage costs are paid at the time of deposit and the risk-free rate is 10% per annum. What would the price of one-month gold futures if the delivery unit is one kg? Assume that one month is equal to 4 weeks.
[A]6120
[B]6056
[C]6068
[D]6086



7. Delivery in respect of all deals for the clearing in commodities happens through the _________________.
[A]Clearing house
[B]Exchange
[C]Approved banks
[D]Depository clearing system



8. A January expiration contract would expire on the ____________of January.
[A]28th
[B]Last Thursday
[C]20th
[D]Last Friday



9. Which of the following feature differentiates a commodity futures contract from a financial futures contract?
[A]Standardised contract size
[B]MTM settlement
[C]Varying quality of underlying asset
[D]Exchange traded product



10. A trader has purchased crude oil futures at Rs.750 per barrel. He wishes to limit his loss to 20%. He does so by placing a stop order to sell an offsetting contract if the price falls to or below __________.
[A]Rs.600
[B]Rs.650
[C]Rs.800
[D]Rs.825



11. ___________ give the buyer the right but not the obligation to sell a given quantity of the underlying asset, at a given price on or before a given future date.
[A]Forwards
[B]Futures
[C]Put options
[D]Call options



12. One unit of trading for soy bean futures is 10 Quintals, and delivery unit is 100 Quintals. A trader buys 10 units of soy bean at Rs.1500/Quintal on the futures market. A week later soy bean futures trade at Rs.1450/Quintal. How much profit/loss has he made on his position?
[A](+)50,000
[B](+)5000
[C](-)5000
[D](-)50,000



13. An put option with a strike price of 150 trades in the market at Rs.8. The spot price is Rs.160. The time value of the option is Rs._________.
[A]8
[B]10
[C]0
[D]2
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14. Of the following, NCDEX trades ________ futures.
[A]Wheat
[B]Pepper
[C]Jaggery
[D]Soybean
Soybean")' />


15. On the 15th of January a refined soy oil producer has negotiated a contract to sell 10,000 Kgs of soy oil. It has been agreed that the price that will apply in the contract is the market price on the 15th April. The spot price for soy oil on January 15 is Rs.400 per 10 Kgs and the April soy oil futures price on the NCDEX is Rs.415 per 10 Kgs. Unit of trading in soy oil futures is 1000 Kgs (=1 MT) and the delivery unit is 10000 Kgs (=10 MT). The producer can hedge his exposure by _____________________.
[A]Buying 100 units of April futures
[B]Buying 10 units of April futures
[C]Selling 100 units of April futures
[D]Selling 10 units of April futures
Selling 10 units of April futures")' />


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