Financial Markets and Institutions MCQs

[set-10]

226. ........................ is an apex institution to coordinate, supplement and integrate

the activities of all existing specialised financial institutions.
A. IFCI
B. IDBI
C. RBI
D. SEBI
Answer: B

227. Hedging through futures contracts

o m
A. increases risk of loss if prices fall
. c
B. eliminates profit maximization potential
te
C. is considered to be speculative in nature
a
D. all of the above
Answer: B
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228. In what city are the twoM
c
largest commodities exchanges?
A. Chicago
B. New York
C. Kansas City
D. Minneapolis
Answer: A

229. 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
Answer: D

230. 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.
Answer: C

231. 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.
Answer: C

232. Which of the following can be the underlying for a commodity derivative
contract?
A. Interest Rate
B. Euro-Indian Rupee
C. Gold
D. NIFTY
Answer: C

233. 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
Answer: A

234. ----------is the actual process of exchanging money and goods.

A. Transfer
B. Settlement
C. Netting
D. Clearing
Answer: B

235. -----------work at making profits by taking advantage of discrepancy between

prices of the same product across different markets.

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 A. Arbitragers
B. Speculators
C. Exchange
D. Hedgers
Answer: A

236. Commodity exchanges enable producers and consumer to hedge their

-----------given the uncertainty of the future.
A. seasonal risk
B. profit risk
C. production risk
D. price risk
Answer: D

237. 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
Answer: C

238. ----------- Exchanges provide real time, online, transparent and vibrant spot
platform for commodities.
A. Electronic Spot
B. Regional
C. Futures
D. Stock
Answer: A

239. ----------can only trade through their account or on account of their clients and
however clear their trade through PCMs/STCMs.
A. Trading cum Clearing Member
B. Trading Member
C. Commodity Participant
D. Associate Member
Answer: B

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240. The minimum net worth requirement for PCM on the NCDEX is-----------.
A. 50 Lakh
B. 500 Lakh
C. 5000 Lakh
D. 5 Lakh
Answer: C

241. Members of commodity market can opt to meet the security deposit
requirement by way of -- ---------
A. Cash
B. Bank Guarantee
C. Fixed Deposit Receipts
D. All of the above
Answer: D

242. In the case of certain commodities like gold and silver, delivery is staggered
over last ------ days of the contract.
A. Two
B. Three
C. Five
D. Thirteen
Answer: C

243. Unit of trading for Wheat at NCDEX is---------

A. 1 MT
B. 3 MT
C. 1 kg
D. 10 MT
Answer: D

244. At present how many national commodity exchanges are operating in India?
A. 8
B. 7
C. 6
D. 10
Answer: C

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245. Regulatory body of commodity market in India is-------------
A. FMC
B. NCX
C. ICE
D. ICRA
Answer: A

246. Forward Market Commission (FMC) established in the year-----------

A. 1948
B. 1964
C. 1953
D. 1952
Answer: C

247. FMC merged with SEBI in the year------------

A. 1994
B. 2008
C. 2015
D. 2016
Answer: C

248. The year of establishment of National Multi- Commodity Exchange (NMCE)

was---------
A. 2002
B. 2003
C. 2004
D. 2005
Answer: A

249. The Headquarters of NMCE is -------------

A. New Delhi
B. Ahmedabad
C. Mumbai
D. Calcutta
Answer: B

250. -----------is the world’s largest exchange in silver and gold

A. NMCE

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 B. MCX
C. ICEX
D. NCDEX
Answer: B

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