PT Ch26

PT Ch26 - Exam Name MULTIPLE CHOICE Choose the one...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The exchange uses the settlement price to ________ the investor's position, so that any gain or loss from the position is quickly reflected in the investor's equity account. 1) A) mark to sale B) settle to market C) mark to settle D) mark to market 2) The futures price and the cash market price are tied together by the ________. 2) A) expense of bearing. B) cost of conveying. C) expense of bearing D) cost of carry. 3) Which of the below statements is FALSE? 3) A) Maintenance margin is the minimum level (specified by the exchange) to which an investor's equity position may fall as a result of an unfavorable price movement before the investor is required to deposit additional margin. B) When securities are acquired on margin, the difference between the price of the security and the initial margin is loaned from the broker. C) Unlike initial margin, the variation margin must be in cash rather than interest - bearing instruments. D) A party taking a position in a futures contract need not put up the entire amount of the investment. 4) In regards to a futures contract, which of the below statements is FALSE? 4) A) The price at which the parties agree to transact in the future is called the futures price. B) When entering into a futures contract, the parties to the contract agree to buy or sell a specific amount of a specific item at a specified future date. C) The designated date at which the parties must transact is called the settlement date or delivery date. D) When an investor takes a position in the market by buying a futures contract (or agreeing to buy at the future date), the investor is said to be in a short position or to be short futures. 5) When a position is first taken in a futures contract, the investor must deposit a ________ dollar amount per contract as specified by the exchange. This amount, called ________, is required as a deposit for the contract. 5) A) minimum; initial margin B) maximum; maximum margin C) minimum; minimum margin D) maximum; initial margin 6) ________ of only actively traded New York Stock Exchange and Nasdaq stocks are traded. The contracts are for 100 share of the ________ stock. At the settlement date, ________ of the stock is required. 6) A) Single stock futures; original; physical delivery B) Single stock futures; underlying; physical delivery C) Single stock futures; underlying; single delivery D) Multiple stock futures; original; multiple delivery 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
7) In regards to the Treasury bill futures contract, which of the below statements is FALSE? 7) A) The Treasury bill futures contract, which is traded on the IMM, is based on a 25 - week (six - month) Treasury bill with a face value of $1,000. B) Treasury bills are quoted in the cash market in terms of the annualized yield on a bank
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 01/24/2012.

Page1 / 6

PT Ch26 - Exam Name MULTIPLE CHOICE Choose the one...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online