Question 1

A ______market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar.

Accepted Answer

A commodity market is the correct term for a market that trades in primary economic sector goods like cocoa, fruit, and sugar, rather than manufactured products. These markets typically involve raw materials.

Question 2

Traditionally ____________ has been the largest producers of gold in the world.

Accepted Answer

Traditionally, South Africa has been one of the largest producers of gold in the world, with a rich history of gold mining that dates back to the late 19th century.

Question 3

Commodities, which are to be received by a clearing member, are delivered to him in the depository clearing system in respect of depository deals on the respective __________ day as per instructions of the exchange/ clearing house.

Accepted Answer

In the depository clearing system, commodities are delivered to the clearing member on the pay-out day as per the instructions of the exchange/clearing house.

Question 4

By using the currency forward market to sell dollars forward, an _________ can lock on to a rate today and reduce his uncertainty.

Accepted Answer

An exporter can use the currency forward market to sell dollars forward, locking in a rate today to reduce uncertainty about future exchange rates when converting foreign currency earnings back to dollars.

Question 5

All the exchanges, which deal with forward contracts, are required to obtain certificate of registration from the _______________.

Accepted Answer

Forward Markets Commission (FMC) was the regulatory authority for commodity futures/forward markets in India. It was merged with the Securities and Exchange Board of India (SEBI) in 2015, but historically, entities dealing with forward contracts were required to obtain a certificate of registration from the FMC.

Question 6

This option to give delivery is given during a period identified as _______________________.

Accepted Answer

Delivery period is the period during which the option to give delivery is given.

Question 7

The first use of derivatives contract was ________________.

Accepted Answer

The first use of derivatives contracts was to manage price uncertainty. This was done by farmers and producers who wanted to lock in prices for their crops or products to protect against price fluctuations.

Question 8

A futures contract is nothing but a forward contract that is __________.

Accepted Answer

Futures contracts are standardized agreements traded on organized exchanges, unlike forward contracts which are over-the-counter agreements between two parties.

Question 9

In matters where the exchange is a party to the dispute, the civil courts at __________have exclusive jurisdiction.

Accepted Answer

The civil courts at Mumbai have exclusive jurisdiction in matters where the exchange is a party to the dispute, as Mumbai is the financial capital of India and home to major stock exchanges.

Question 10

Final settlement happens on the ____________.

Accepted Answer

Final settlement happens on the last trading day of the futures contract. This is when the actual exchange of the underlying asset or cash equivalent (depending on the futures contract) takes place, closing out the contract.

Quiz 1: Commodity Market

A ______market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar.