100+ Free NISM Series XVI Practice Questions
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Key Facts: NISM Series XVI Exam
100 questions
The exam has 100 one-mark multiple-choice questions for 100 marks
NISM - Series XVI Commodity Derivatives
2 hours
Candidates have 120 minutes to complete the examination
NISM - Series XVI Commodity Derivatives
60%
The passing score is 60 marks out of 100
NISM - Series XVI Commodity Derivatives
25%
Negative marking of 25% applies to each question answered wrongly
NISM - Series XVI Commodity Derivatives
Rs 1,500
The examination fee is Rs 1,500 plus payment-gateway charges
NISM - Series XVI Commodity Derivatives
3 years
The certificate is valid for three years from the date of passing
NISM - Series XVI Commodity Derivatives
10 units
The syllabus spans ten units from commodity markets to code of conduct
NISM - Test Objectives for Series XVI
2015
SEBI became the commodity derivatives regulator when the FMC merged into it in 2015
SEBI / NISM - Series XVI workbook
The NISM-Series-XVI: Commodity Derivatives Certification Examination is a SEBI-mandated certification for approved users and sales personnel in the commodity derivatives segment of recognised stock exchanges. It consists of 100 one-mark multiple-choice questions to be completed in 2 hours, with a passing score of 60% and negative marking of 25% per wrong answer. The fee is Rs 1,500 and the certificate is valid for three years. The syllabus spans ten units: commodity markets, commodity indices, futures, options, uses of derivatives, trading mechanism, clearing/settlement/risk management, the legal-regulatory environment, accounting/taxation and code of conduct. This 100-question bank provides original practice across all ten units with explained answers.
Sample NISM Series XVI Practice Questions
Try these sample questions to test your NISM Series XVI exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1Which Indian regulator became responsible for the commodity derivatives markets after September 2015?
2In a spot market for commodities, delivery and payment typically take place:
3Which of the following is a key economic function performed by commodity derivatives markets?
4Which of the following is the largest commodity derivatives exchange in India by traded volume, especially in non-agricultural commodities?
5A farmer who sells futures contracts to lock in a price for a crop he will harvest later is best described as a:
6Which entity in the commodity market ecosystem is responsible for storing physical commodities and issuing electronic warehouse receipts?
7Bullion in the context of Indian commodity derivatives markets refers primarily to:
8Which of the following is generally considered an agricultural commodity traded on Indian derivatives exchanges?
9An 'approved user' or 'sales personnel' of a trading member in the commodity derivatives segment is primarily required to obtain the NISM Series XVI certification in order to:
10Compared with the physical (spot) market, a commodity derivatives market improves market efficiency mainly by:
About the NISM Series XVI Exam
The NISM-Series-XVI: Commodity Derivatives Certification Examination creates a common minimum knowledge benchmark for associated persons functioning as approved users and sales personnel of trading members in the commodity derivatives segment of a recognised stock exchange. The examination tests understanding of commodity markets, commodity futures and options, the uses of commodity derivatives for hedging, speculation and arbitrage, the trading mechanism, and the clearing, settlement, risk-management and warehousing arrangements operated by exchanges and clearing corporations. It also covers the legal and regulatory environment under SEBI, which became the regulator for commodity derivatives following the 2015 merger of the Forward Markets Commission into SEBI, together with accounting, taxation, code of conduct and investor protection. The exam has 100 one-mark multiple-choice questions to be completed in two hours, requires 60% to pass and applies 25% negative marking.
Assessment
100 multiple-choice questions of 1 mark each, totalling 100 marks, across ten units from introduction to commodity markets through code of conduct and investor protection.
Time Limit
2 hours (120 minutes).
Passing Score
60% (60 marks out of 100), with negative marking of 25% of the marks assigned to each question.
Exam Fee
Rs 1,500 plus payment-gateway charges; the certificate is valid for three years. (National Institute of Securities Markets (NISM), established by SEBI.)
NISM Series XVI Exam Content Outline
Introduction to Commodity Markets
History of commodity trading in India and globally, the evolution of commodity exchanges, electronic and physical spot markets, the economic functions of derivatives, major commodities traded, market participants and the broader commodity-market ecosystem including warehouses and assayers.
Commodity Indices
What commodity indices are and how they are constructed, important Indian and international commodity indices, and trading and uses of derivatives on commodity indices.
Commodity Futures
Features and payoff of futures contracts, the cost-of-carry pricing model, basis and basis risk, convergence of spot and futures prices at expiry, contango and backwardation, and how commodity futures differ from forwards.
Commodity Options
Call and put options, premium, moneyness, intrinsic and time value, payoff profiles, option Greeks (delta, gamma, theta, vega, rho), options on commodity futures and basic option strategies.
Uses of Commodity Derivatives
Hedging with long and short positions, basis risk in hedging, speculation, arbitrage and spreads, the selection of contracts for trading and the trading costs that participants incur.
Trading Mechanism
Exchange membership, order types and trading parameters, contract specifications, price bands, position limits and the role of trading members and authorised persons.
Clearing, Settlement and Risk Management
The role of the clearing corporation and novation, the margining system including SPAN initial margin and Extreme Loss Margin, mark-to-market settlement, daily and final settlement, delivery and warehousing, and the Settlement Guarantee Fund.
Legal and Regulatory Environment
SEBI as the regulator of commodity derivatives following the 2015 merger of the Forward Markets Commission into SEBI under the Securities Contracts (Regulation) Act, exchange and clearing-corporation regulations and investor grievance mechanisms.
Accounting and Taxation
Accounting for commodity-derivative trades including mark-to-market entries, and important tax aspects such as treatment of gains as business income or speculation and applicable transaction taxes.
Code of Conduct and Investor Protection Measures
Code of conduct for trading members and approved users, investor protection measures, grievance redressal, arbitration and the investor protection fund.
How to Pass the NISM Series XVI Exam
What You Need to Know
- Passing score: 60% (60 marks out of 100), with negative marking of 25% of the marks assigned to each question.
- Assessment: 100 multiple-choice questions of 1 mark each, totalling 100 marks, across ten units from introduction to commodity markets through code of conduct and investor protection.
- Time limit: 2 hours (120 minutes).
- Exam fee: Rs 1,500 plus payment-gateway charges; the certificate is valid for three years.
Keys to Passing
- Complete 500+ practice questions
- Score 80%+ consistently before scheduling
- Focus on highest-weighted sections
- Use our AI tutor for tough concepts
NISM Series XVI Study Tips from Top Performers
Frequently Asked Questions
How many questions are on the NISM Series XVI exam and how long is it?
The examination has 100 multiple-choice questions of 1 mark each, for a total of 100 marks, and must be completed within 2 hours (120 minutes).
What is the passing score for NISM Series XVI?
Candidates must score 60% (60 marks out of 100) to pass. There is negative marking of 25% of the marks assigned to each question, so wrong answers reduce your score.
What does the NISM Series XVI certification cover?
It covers commodity markets, commodity indices, futures and options, uses of derivatives such as hedging and arbitrage, the trading mechanism, clearing, settlement and risk management, the SEBI regulatory framework, accounting and taxation, and code of conduct.
Who needs the NISM Series XVI certification?
SEBI requires associated persons acting as approved users and sales personnel of trading members in the commodity derivatives segment of a recognised stock exchange to hold this certification.
Who regulates commodity derivatives in India?
SEBI regulates commodity derivatives. The Forward Markets Commission was merged into SEBI in September 2015, bringing commodity derivatives under the Securities Contracts (Regulation) Act framework.
How much does the exam cost and how long is the certificate valid?
The examination fee is Rs 1,500 plus payment-gateway charges, and the certificate is valid for three years from the date of passing. Validity can be extended through the CPE programme.