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Derivatives Class 10 Questions and Answers provides important questions with simple and clear answers on the topic of derivatives. It covers basic concepts such as futures, options, underlying assets, risk management, and the role of derivatives in financial markets. These questions are useful for Class 10 students for understanding the topic, revision, and exam preparation.
Derivatives Class 10 Questions and Answers
Q. Which of the following is a characteristic of future contracts ? (CBSE 2025-26)
(A) They are traded over-the counter.
(B) They are standardised and traded on exchanges.
(C) They are customized to meet the needs of individual buyers and sellers.
(D) They carry a high degree of counterparty risk.
Answer: (B) They are standardised and traded on exchanges.
Q. What is the role of the commodity derivatives market ? (CBSE 2025-26)
(A) Facilitating buying and selling in spot market.
(B) Providing logistic services and other facilities.
(C) Assists, regulates, or controls the business of buying, selling or dealing only in commodity derivatives.
(D) Promoting over-the counter markets.
Answer: (C) Assists, regulates, or controls the business of buying, selling or dealing only in commodity derivatives.
Q. Commodity derivatives market trade contracts for which the underlying asset is __________. (CBSE 2024-25)
(A) Index
(B) Currency
(C) Stock
(D) Commodity
Answer: (D) Commodity
Q. Which of the following is not traded on exchange ? (CBSE COMP 2024-25)
(A) Futures Contract
(B) Forward Contract
(C) Options Contract
(D) Commodity Derivatives
Answer: (B) Forward Contract
Q. The quality of asset underlying a contract can vary at times under which derivatives ? (CBSE COMP 2024-25)
(A) Commodity Derivatives
(B) Financial Derivatives
(C) Currency Derivatives
(D) Stock Option
Answer: (A) Commodity Derivatives
Q. ______________ is a product whose value is derived from the value of one or more basic variables called ‘underlying’. (CBSE COMP 2024-25)
(A) Stock
(B) Debt instrument
(C) Derivative
(D) Mutual Fund
Answer: (C) Derivative
Q. Commodity derivatives market trade contracts for which the underlying asset is . (CBSE 2022-23)
(a) Interest
(b) Currency
(c) Stock
(d) Commodity
Answer: (d) Commodity
Q. A farmer agrees to sell his produce of wheat to a Miller, 6 months later when his crop is ready, he sells his wheat produce at a price that is agreed upon today by both the parties. Identify the type of contract. (CBSE 2024-25)
Answer: This is a Forward Contract. A forward contract is a customized agreement between two parties to buy or sell an asset at a predetermined price on a specified future date.
Q. Mr. Iyer is seller and Mr. Raj is the buyer of this contract. The predetermined quantity of rice to be sold is 500 kg and the price at which the rice will be sold is = 20 per kg. Hence, the price of contract is % 10,000 (500 x 20), which derives its value from the underlying – rice. The contract will be future date – two months from now. This will happen when the rice will be delivered to Mr. Raj’s warehouse and Mr. Iyer will receive ¥ 10,000. Identify this contract. (CBSE 2023-24)
Answer: This is a Futures Contract. A futures contract is an agreement between two parties to buy or sell an asset at a specified future date and at a predetermined price.
Q. National Commodity and Derivatives Exchange Limited (NCDEX) is a national-level, technology-driven online commodity exchange with an independent Board of Directors and Professional management. In the context of this statement, define the Commodity Exchange. (CBSE 2023-24)
Answer: A Commodity Exchange is an organization or company that provides a platform for trading in commodity derivatives and futures contracts. It allows buyers and sellers to trade commodities in an organized and regulated market.
Q. __________ are High Risk Investments. (CBSE 2023-24)
Answer: Equities (Shares) are high risk investments.
They have the potential to provide higher returns, but investors may also lose part or all of their investment if prices move unfavourably.
Q. A buyer of an option pays for the right to exercise his option. Identify term used for this. (CBSE 2022-23)
Answer: The term used is Option Premium. Option Premium is the amount paid by the buyer of an option to the seller for acquiring the right to buy or sell the underlying asset.
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