1.

A narrowing of basis in backwardation market results in –

a. Benefit to the long hedger
b. Benefit to the short hedger
c. Loss to the long hedger and short hedger
d. Loss to long hedger
2. Which of the following is not the duty of the trading member?
a. Assisting the client to arrange for margins
b. Filling of KYC form
c. Execution of client broker agreement
d. Bringing risk factors to the knowledge of clients
3. Futures trading commenced first on
a. Chicago mercantile exchange
b. London international financial futures and options exchange
c. CBO exchange
d. CBOT
4. What is the value of 1 tick, if the tick size of MCX cardamom futures contract is 10 paise and
trading unit and basis unit is 100 kg and 1 kg respectively?
a. 1
b. 10
c. 100
d. 1000
5. Under which of the following conditions, the delivery is considered as complete?
a. Buyer makes full payment of the delivery
b. Buyer lifts delivery of the commodity
c. Seller delivers the commodity at the designated delivery centre
d. Surveyor certifies the quality and quantity of the commodity delivered.
6. Rahul buys 600 units @ 140 and sell 400 @ rate of 130. The settlement price is 130. What is the
mtm profit/loss?
a. 7200
b. 8000
c. -6000
d. 600
7. The OCT futures contract of RELCAP closed at 1820 yesterday. It closes today at 1780. The spot
closes at 1750. A trader has a short position of 3000 in OCT futures contract. He sells 2000 units
of Oct expiring put options on RELCAP with a strike price of 1800/- for a premium of 73 per unit.
What is the net obligation from/to clearing corporation today?
a. Pay in of Rs.344,200
b. Pay In of Rs. 266,200
c. Pay out 645,000
d. Pay out of 266,000
8. In april 2008, a food processing firm estimates that it will require 25MT of Jeera in may 2008.
Trading unit of May Jeera futures contract at MCX is 2MT. if MCX May jeera future contract is
 trading at rs. 7100 per 100 kg and hedge ratio works out to be 1.20, then the firm should _____
for optimum hedge.
a. Buy 15 lots of May Jeera Future
b. Buy 30 lots
c. Sell 15 lots
d. Buy 10 lots
9. Which of the following options can be exercised only on the expiry date?
a. American Options
b. In the money
c. At the money
d. European
10. The reason for future contracts to be more preferred as compared to forward contracts is due
to _____.
a. Less transparency of futures contracts.
b. Higher credit risk in futures contracts.
c. Higher counter party default risk in futures contracts.
d. Low counterparty default risk and greater liquidity in futures contracts.
11. Weekly options traded on NSE follow an ______.
a. European style settlement
b. Weekly options are not traded on NSE
c. Asian style settlement
d. American style settlement.
12. Mr. Arun buys two futures contracts of Gold (1kg per futures contract) at the price of Rs.12,000
per 10 gm. If after 1 month the futures price is Rs.11,800 per 10 gms what is the profit/loss
made by Mr.Arun if he squares off his position?
a. + 20,000
b. – 40,000
c. -20,000
d. +40,000
13. The payoff for a person involved in short hedge when the cash and future prices rise is ____
a. Profit in cash markets and loss in futures.
b. Loss in cash markets and profits in futures.
c. Profit in both cash and futures markets.
d. Loss in both cash and future markets.
14. Statement A – Put call ratio is an indicator to measure the market sentiment. Statement B – Roll
over refers to open positions in future contracts are closed around expiry and similar fresh
positions are taken for the subsequent month
a. Both are false.
b. A true B false
c. Both are true
d. A false B true.
15. A call option at the strike price of Rs.176 is selling at a premium of Rs.8. At what price will it
break even for the buyer of the option?
a. 204
b. 184
c. 196
d. 187
16. Statement A – Long hedge means selling a futures contract to hedge a spot position. Statement
B – short hedge is done with the purpose of protecting against price increase in the spot
market of a commodity that one intends to buy in the future.
a. A is True, B is False
b. A and B are True
c. A is False B is True
d. A and B are False.
17. What will be the MTM profit/loss of Rohan if he buys 1800 @ 140 and sells 1600 @145. The
settlement price of the day was 335.
a. -4000
b. -6000
c. 2000
d. 7000
18. On November 30, 2007 a trader buys one lot of MCX Silver futures contract that is expiring of
December 5, 2007 at Rs.22500 per kg. The initial margin payable is 5% while the tender period
margin is 25%. The tender period of the contract is starting from December 1. If the contract is
not squared off and left open on Dec 1, and the contract is trading at Rs.22800 per kg, what
would be the margin on Dec 1, over and above the initial margin paid at the time of buying the
contract on Nov 30? Note Delivery period margin is inclusive of initial margin.
a. 171000
b. 135000
c. 137250
d. 168750
19. In March 2008, an arbitrager in the commodity market notices riskless profit in Gold June 2008
futures contract. He borrows Rs.12,80,000 @ 12% pa for 2 months and with this loan amount
buys 1 KG Gold in the cash market @ Rs.12,800 per 10 gm and simultaneously shorts 1 contract
( 1 kg each) of Gold June futures @ 13,100 per 10 gms. On expiry of Gold june futures, he
delivers 1 kg of Gold against outstanding short position and earns a profit of ____ after paying
financing cost for 2 months. (ignore all other misc costs on margin, tax, and assume simple
interest on loan amount)
a. 30000
b. 25600
c. 4400
d. 8800
20.