Top 350+ Solved Financial Markets and Institutions MCQ Questions Answer
Q. Hedging through futures contracts
a. increases risk of loss if prices fall
b. eliminates profit maximization potential
c. is considered to be speculative in nature
d. all of the above
Q. In what city are the two largest commodities exchanges?
a. Chicago
b. New York
c. Kansas City
d. Minneapolis
Q. The financial futures market has evolved over recent time because of
a. volatility and risk in the foreign exchange markets
b. volatility of interest rates
c. appeal to speculators due to low margin requirements
d. all of the above
Q. While hedging through interest rate futures reduces or eliminates the risk of loss, it also
a. is illegal in some cases.
b. has not been accepted by most corporate financial managers.
c. eliminates the possibility of an abnormal gain.
d. none of the above.
Q. Margin requirements on commodities contracts
a. are much higher than those on common stock transactions.
b. vary over time and even among exchanges for a given commodity.
c. typically, are 2 to 10 percent of the value of the contract.
d. none of the above are true.
Q. Which of the following can be the underlying for a commodity derivative contract?
a. Interest Rate
b. Euro-Indian Rupee
c. Gold
d. NIFTY
Q. Daily mark to market settlement is done ------------
a. Till the date of contract expiry
b. As long as the contract makes a loss
c. On the last day of week
d. On the last trading day of the month
Q. ----------is the actual process of exchanging money and goods.
a. Transfer
b. Settlement
c. Netting
d. Clearing
Q. -----------work at making profits by taking advantage of discrepancy between prices of thesame product across different markets.
a. Arbitragers
b. Speculators
c. Exchange
d. Hedgers
Q. Commodity exchanges enable producers and consumer to hedge their -----------given theuncertainty of the future.
a. seasonal risk
b. profit risk
c. production risk
d. price risk
Q. Which of the following is not true about the national level exchanges?
a. Offers online trading
b. Recognised on permanent basis
c. Offers single commodity for trading
d. Volumes higher than regional exchanges
Q. ----------- Exchanges provide real time, online, transparent and vibrant spot platform forcommodities.
a. Electronic Spot
b. Regional
c. Futures
d. Stock
Q. ----------can only trade through their account or on account of their clients and however cleartheir trade through PCMs/STCMs.
a. Trading cum Clearing Member
b. Trading Member
c. Commodity Participant
d. Associate Member
Q. The minimum net worth requirement for PCM on the NCDEX is-----------.
a. 50 Lakh
b. 500 Lakh
c. 5000 Lakh
d. 5 Lakh