Sample Final Questions LaTech

Sample Final Questions LaTech - Use this simple exam to...

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Page 1 Use this simple exam to study for the final by looking up any word you are unfamiliar with. This sample exam should cover the topics most relevant for the exam, though exam questions will be different. Chapter 16 Questions 1. If an asset price declines, the investor with a ___ is exposed to largest potential loss. A) call option B) put option C) long futures contract D) short futures contract 2. The Fridays with simultaneous expiration of S&P index futures, S&P index options and options on some individual stocks are commonly called the _______. A) mad minutes B) trifectas C) happy hours D) triple-witching hours 3. A ______ contract calls for future delivery of an asset at a currently agreed-upon price. A) forward B) futures C) both a and b D) none of the above 4. The open interest on silver futures at a particular time is the number of __________. A) all silver futures outstanding contracts B) outstanding silver futures contracts for a particular delivery month C) silver futures contracts traded during the day D) silver futures contracts traded the previous day 5. Futures and options are similar in all of the following ways except _______________. A) expiration dates are standardized B) deliverable quantities are standardized C) the owner is not obligated to proceed with the transaction D) All of the above are similarities between futures and options
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6. Margin must be posted by ________. A) buyers of futures contracts B) sellers of futures contracts C) both buyers and sellers of futures contracts D) speculators only 7. The maintenance margin is ________________________. A) an established value below which a trader's margin may not fall B) the same as variation margin C) the point at which a margin call will be triggered D) All of the above 8. A futures contract __________. A) is a contract to be signed in the future by the buyer and the seller of a commodity B) is an agreement to buy or sell a specified amount of an asset at a predetermined price on the expiration date of the contract C) is an agreement to buy or sell a specified amount of an asset at the spot price on the expiration date of the contract D) gives the buyer the right, but not the obligation, to buy an asset some time in the future 9. __________ refers to the daily settlement of obligations on future positions. A) Marking to market B) The convergence property C) The open interest D) The triple witching hour 10. You take a long position in a futures contract of one maturity and a short position in a contract of a different maturity, both on the same commodity. This is called __________. A) a cross hedge B) a reversing trade C) a spread position D) none of the above 11. A company which mines bauxite decides to short aluminum futures. This is an example of __________. A)
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Sample Final Questions LaTech - Use this simple exam to...

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