FRM 2026 Part I Financial Markets and Products Futures Free Quiz 2

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FRM 2026 Part I Financial Markets and Products Futures Free Quiz 2

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FRM 2026 Part I Financial Markets and Products Futures Free Quiz 2

Practice FRM 2026 Part I Financial Markets and Products MCQs from Futures. Get instant results with Explanation.

General10 MCQs

1. What is contango in futures markets?

A. Contango is when futures prices are higher than expected spot pricesB. Contango is when futures prices are lower than expected spot pricesC. Contango is the same as backwardationD. Contango does not affect futures pricing

2. What is backwardation in futures markets?

A. Backwardation is when futures prices are higher than expected spot pricesB. Backwardation is the same as contangoC. Backwardation does not occur in commodity marketsD. Backwardation is when futures prices are lower than expected spot prices

3. What is the cost of carry?

A. Cost of carry only includes storage costsB. Cost of carry includes storage, insurance, and financing costsC. Cost of carry is not relevant to futures pricingD. Cost of carry is the same as the convenience yield

4. What is the convenience yield?

A. Convenience yield is the cost of holding inventoryB. Convenience yield is the same as the cost of carryC. Convenience yield is the benefit of holding physical inventoryD. Convenience yield does not affect futures prices

5. What are stock index futures?

A. Stock index futures are cash-settledB. Stock index futures are physically deliveredC. Stock index futures are not tradedD. Stock index futures are the same as equity options

General10 MCQs

6. What are interest rate futures?

A. Interest rate futures are on commoditiesB. Interest rate futures are only for corporate bondsC. Interest rate futures are not used for hedgingD. Interest rate futures are on interest-bearing instruments and used to hedge interest rate risk

7. What is a futures spread?

A. A futures spread is a single positionB. A futures spread involves two opposing positions in related contractsC. A futures spread is the same as a hedgeD. A futures spread is not a trading strategy

8. What is a short hedge and a long hedge?

A. A short hedge protects against price increasesB. A long hedge protects against price declinesC. A short hedge protects against price declines; a long hedge protects against price increasesD. Hedging with futures is always 100% effective

9. What is the formula for the optimal hedge ratio?

A. Optimal hedge ratio = ρ × (σS / σF)B. Optimal hedge ratio = ρ × (σF / σS)C. Optimal hedge ratio = (σS / σF) / ρD. Optimal hedge ratio = ρ / (σS × σF)

10. What are currency futures?

A. Currency futures are traded OTCB. Currency futures are only for large corporationsC. Currency futures are not standardizedD. Currency futures are standardized exchange-traded contracts on foreign exchange rates

📋 FRM - Test Online Practice Quizzes

FRM

Conducting Body: Global Association of Risk Professionals GARP

Frequency: three times a year: May, August, and November | Time: 240 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 100 MCQs):

Foundations of Risk Management: 25 MCQs
Quantitative Analysis: 25 MCQs
Financial Markets and Products: 25 MCQs
Valuation and Risk Models: 25 MCQs

Merit Formula: -

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