sample_exam

sample_exam - Name (print): _ Social Security #: XXX XX -_...

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Name (print): ________________________ Social Security #: XXX – XX -_________ Exam grade: ________________________ THE OHIO STATE UNIVERSITY Fisher College of Business Finance 823 Prof. Kewei Hou January 28, 2010 Sample Exam This exam is being administered under the University’s rules for academic conduct. Open the examination only when directed to do so. The examination lasts 1 hour and 48 minutes and is worth 100 points. Close your books and notes with the exception of one 8 ½´´ x 11´´ ‘crib’ sheets and your calculators. Make any rough calculations on the margin or the reverse side of this exam, and not on any scrap paper. Write the answers only on the pages provided. Answer all the questions. Show your work to receive full credits. Take a deep breath and relax. GOOD LUCK!
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2 Part 1. True/False and Multiple Choice Questions (50 points). 1. (2 points) Both forward and futures contracts are traded on exchanges. (a) True (b) False Answer: False 2. (2 points) Futures contracts are standardized; forward contracts are not. (a) True (b) False Answer: True 3. (2 points) The S&P500 index futures contract is a physical delivery contract. The pork bellies futures contract is a cash-settled contract. (a) True (b) False Answer: False 4. (2 points) When a CBOE option on IBM is exercised, IBM issues more stock. (a) True (b) False Answer: False 5. (2 points) An American option can be exercised at any time during its life. (a) True (b) False Answer: True 6. (2 points) A put option will always be exercised at maturity if the strike price is greater than the underlying asset price. (a) True (b) False Answer: True
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3 7. (2 points) The fact that the exchange is the counter-party to every futures contract issued is important because it eliminates interest rate risk. (a) True (b) False Answer: False 8. (2 points) Margin must be posted by both buyers and sellers of futures contracts. (a) True (b) False Answer: True 9. (2 points) Index arbitrage is a strategy which exploits differences between actual futures prices and their no-arbitrage values. (a) True (b) False Answer: True 10. (2 points) An investor with a short position in Treasury note futures will profit if interest rates decrease. (a) True
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This note was uploaded on 04/13/2010 for the course FIN 823 taught by Professor Keweiho during the Spring '10 term at Ohio State.

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sample_exam - Name (print): _ Social Security #: XXX XX -_...

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