With reference to commodity trading in India, consider the following statements: 1. Commodity exchanges enable futures trading, helping participants hedge against price risk. 2. Farmers are the primary participants in commodity futures markets in India. 3. The Forward Markets Commission is a statutory regulatory authority for the commodity derivatives market in India. Which of the statements given above is/are correct? |ForumIAS

[A] 1 and 2 only

[B] 1 and 3 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: B

Notes:

Explanation:

Commodity exchanges do facilitate futures trading and help hedge against price risks caused by fluctuating commodity prices.
The farmers do not largely operate in the futures market due to operational difficulties and lack of knowledge.
The Forward Markets Commission (FMC)is a statutory regulatory authority for the commodity derivatives market in India. It was established in 1953 under the Forward Contracts (Regulation) Act (FCRA), 1952.

Source: Indian Economy (Ramesh Singh)