Applied Knowledge & Practice Flashcards
7 cards from real Series 3 – The National Commodities Futures Test practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Applied Knowledge & Practice flashcards as text
Initial margin is $5,000 and maintenance is $4,000. Equity falls to $3,800. What must the customer deposit to meet the call?
Answer: $1,200
A margin call requires restoring equity to the initial level, so $5,000 - $3,800 = $1,200.
A corn contract covers 5,000 bushels. A customer is long 3 contracts and price rises 6 cents. What is the gain?
Answer: $900
0.06 x 5,000 x 3 = $900.
A crude oil contract is 1,000 barrels with a $0.01 minimum tick. What is one tick worth?
Answer: $10
0.01 x 1,000 barrels = $10 per tick.
What does daily mark-to-market settlement do?
Answer: Adjusts accounts for gains and losses each day
Futures accounts are credited or debited daily based on the settlement price.
What happens when a futures price reaches its daily limit?
Answer: Trades cannot occur beyond the limit price
At the limit, trades may only occur at or within the limit price.
What is the main purpose of speculative position limits?
Answer: Prevent manipulation and excessive concentration
Position limits curb market manipulation and undue concentration.
How do most futures traders exit a position?
Answer: Entering an offsetting trade
The vast majority of contracts are closed out by an offsetting trade before delivery.
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Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- finra.org — Score release, test dates, test delivery, fees, exam format, passing score · verified Oct 2026
- nfa.futures.org — Eligibility, score validity · verified Oct 2026