Strategic Planning & Analysis 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 Strategic Planning & Analysis flashcards as text
A wheat farmer expects to harvest in three months and fears falling prices. Which hedge is most appropriate?
Answer: Sell wheat futures
A producer holding or expecting inventory protects against price declines with a short hedge.
A cereal manufacturer needs to buy oats in four months and wants protection against rising prices. What hedge fits?
Answer: Long hedge by buying oat futures
A buyer of the physical commodity locks in cost with a long hedge.
A grower plans to hedge 500,000 bushels of corn using 5,000-bushel contracts. How many contracts are needed for a one-to-one hedge?
Answer: 100
500,000 divided by 5,000 equals 100 contracts.
A producer sells December corn futures at $5.00 when the basis is -$0.15. When the hedge is lifted, the basis is -$0.10. Ignoring costs, what is the net selling price?
Answer: $4.90
Net price equals the futures sale price plus the final basis: 5.00 + (-0.10) = $4.90.
Buying wheat futures and selling corn futures is an example of which type of spread?
Answer: Intermarket spread
An intermarket spread involves related but different commodities.
A trader buys one July contract, sells two September contracts, and buys one December contract. This is called what?
Answer: A butterfly spread
Long one, short two, long one across three delivery months defines a butterfly spread.
A trader expects a nearby contract to gain on a deferred contract in an inverted market. Which position expresses this view?
Answer: Long nearby, short deferred
A bull spread buys the nearby and sells the deferred to profit as the nearby strengthens relative to the deferred.
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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