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NISM Certifications · NISM-Series-XV: Research Analyst · Fundamental Analysis of Commodities

A gold jeweller holds 10 kg of gold bought at Rs 6,000 per gram and fears a price fall. She sells gold futures covering the full quantity at Rs 6,100 per gram. At expiry spot and futures both settle at Rs 5,900 per gram, ignoring basis difference. What is her net realised value for the 10 kg position including the futures gain?

The net realised value is Rs 6,10,00,000. Selling 10,000 grams at Rs 5,900 gives Rs 5,90,00,000, and the short futures gain of Rs 200 per gram adds Rs 20,00,000, effectively locking in the futures price of Rs 6,100 per gram.

  1. ARs 6,10,00,000Correct
  2. BRs 5,90,00,000
  3. CRs 6,00,00,000
  4. DRs 6,20,00,000

Explanation

10 kg = 10,000 g. Physical sold at 5,900 gives Rs 5,90,00,000. Futures gain = (6,100 - 5,900) x 10,000 = Rs 20,00,000. Total = Rs 6,10,00,000, which equals 6,100 x 10,000, the locked-in futures price. Rs 5,90,00,000 ignores the hedge gain.

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