The National Commodity Futures Examination is more commonly known as the Series 3 Exam. Passing the Series 3 is required by the National Futures Association in order to sell futures contracts. The test is administered by FINRA, and the primary topics include futures trading theory, regulation, hedging, and speculation. Start your review now with our free Series 3 practice exam.
Which of these positions describes a long hedge?
Long on the commodity and short the futures contract.
Long on the commodity and long the futures contract.
Short on the commodity and long the futures contract.
Short on the commodity and short the futures contract.
Which of the following is true of position traders?
They are a type of day trader.
They hold positions for longer terms.
They seek to profit from short-term fluctuations.
They will only hold long positions.
A trader owns 4 wheat contracts and sells them for a profit of $0.15/bu. The total commission is $90 and the contract size is 5,000 bushels. What is the trader's profit?
0.15 ∗ 5,000 = 750
There are 4 contracts: 4 ∗ 750 = 3,000
Less commission: 3,000 − 90 = 2,910.
Markets are inverted when:
the cash price is above the futures price.
the cash price is below the futures price.
supplies of a commodity are high, driving down short-term prices.
none of the above.
When setting up a new account, FCM's must obtain the customer's previous investment and futures trading experience.
How many years do NFA members need to retain financial and compliance records?
Soybean futures contracts are quoted in which of the following?
Which types of contracts are standardized and exchange-traded?
Both futures and forwards.
None of the above.
An inverted yield curve is formed when short-term yields fall below long-term yields.
A put with a strike price of $4.20 was purchased by your client at 5 cents. The underlying futures price is now $4.10. What is the intrinsic value of the put?
4 dollars and 10 cents.
Related Exams and Resources
Series 3 Exam
This exam consists of 120 multiple choice questions that must be completed within two hours and thirty minutes. It is a challenging test, so be sure to do plenty of Series 3 exam prep. Work through as many Series 3 sample questions as possible, starting with our free practice exam.