GENERAL KNOWLEDGE

GK

BANKING AWARENESS AND SEBI

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which of the following is known as the concept of a standard contract to buy or sell a specified commodity at a certain date in future and at a market driven price?

A	Market Contract
B	Futures Contract
C	Forward Contract
D	Standard Contract

Explanation:

Detailed explanation-1: -A futures contract gives the buyer (or seller) the right to buy (or sell) a specific commodity at a specific price at a predetermined date in the future.

Detailed explanation-2: -Futures Trading Example: For example, if someone wants to buy a September crude oil futures contract. So they make a futures contract that they will buy 200 barrels of oil from the agreed price as of September expiration whatever the market price at that time.

Detailed explanation-3: -A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement. Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity.

There is 1 question to complete.