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Consider the following statements.
  1. In India, Agricultural commodities like cotton, paddy, soyabean, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX).
  2. Derivatives are short-term financial contracts that are bought and sold in the market.
  3. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract.
Which of the above statements is/are correct?
  • a)
    1, 2 
  • b)
    1, 3 
  • c)
    2, 3 
  • d)
    1, 2, 3
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements. In India, Agricultural commodities ...
  • Agricultural commodities like cotton, paddy, soyabean, soya oil, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX).
  • Derivatives are short-term financial contracts that are bought and sold in the market. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract. The derivatives trade can be in futures and options.
  • In a futures contract, a supplier pledges to sell a certain quantity at a fixed price at a future date. Also, farmers can put fixed amounts of their produce, which fits the quality standards of the exchange, to be sold at a fixed price — almost like price insurance. Both contracts can be exited by either the producer or the trader by paying a margin price to the exchange.
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Consider the following statements. In India, Agricultural commodities like cotton, paddy, soyabean, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX). Derivatives are short-term financial contracts that are bought and sold in the market. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer?
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Consider the following statements. In India, Agricultural commodities like cotton, paddy, soyabean, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX). Derivatives are short-term financial contracts that are bought and sold in the market. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. In India, Agricultural commodities like cotton, paddy, soyabean, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX). Derivatives are short-term financial contracts that are bought and sold in the market. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. In India, Agricultural commodities like cotton, paddy, soyabean, mustard seed, etc., are traded on the National Commodities and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange (MCX). Derivatives are short-term financial contracts that are bought and sold in the market. Profits are made in the derivatives trade by predicting price movements of the asset that underlies the contract.Which of the above statements is/are correct?a)1, 2b)1, 3c)2, 3d)1, 2, 3Correct answer is option 'D'. Can you explain this answer?.
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