Final Exam Key

Final Exam Key - Final Exam Financial Markets in the Global...

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Final Exam Financial Markets in the Global Society March 10, 2011 Name_____________________ Short answer 1) If you had a short position of 3 contracts in the EuroFx contract and your buy stop order was executed 80 ticks away (higher than where you got short), did you make or lose on this position? (Show your math!) Your math must be correct and should indicate an accurate positive or negative number to get credit ! 3x$12.50x(-80)= $3000.00 2) If a trendline appears on the chart for the Euro at 1.4300 (above the market) and the market trades through that level, one might say the market had broken through a ______________ (one word) level. Resistance 3) What did we observe is the specific main advantage of owning a trading right (formerly referred to as a “seat”) on the CME (as an example) today? Preferred, lower fees 4) We watched the NOVA video, “Mind Over Matter,” As an apparent demonstration of irrational behavior, specifically what did the test group bid up to 28 dollars? A twenty dollar bill 5) In a posted resource in Course Documents/Articles/Exchange News, there is a link to “Remarks, Implementing the Dodd-Frank Act.” Who made the remarks? CFTC Chairman Gary Gensler 6) In the posted article from the Financial Times (from 2009), “Let the Battle Commence” over what market is the battle being fought? OTC products….CDS , etc. 7) Describe the difference between a hedger and a speculator. Hedger lays off risk in the market, speculator takes risk . 8) In the article titled, “Gladwell’s Traders,” we read this statement about one of the traders: “There is very little active trading, because the options that the fund owns are selected by computer. Most of those options will be useful only if the market does something dramatic, and, of course, on most days the market doesn't.” So the job of __________ and his team is to wait and to think.” Fill in the blank—is it Niederhoffer or Taleb ? 9) In the Course Documents/Articles section of Blackboard we read an article about the proposed deal between Deutsche Boerse and the NYSE Euronext. There is another article about a deal between two other exchanges. Name them (hint: neither is in the US). The London Stock Exchange and the Toronto Stock Exchange 10) We read a posted article that stated, “ A recent study shows people are twice as likely to seek information that confirms their beliefs than they are to consider evidence that contradicts them.” What term do psychologists call this “mental gremlin?” ( NOT in psych text!) Confirmation Bias 11) When a market makes a new all time high and then closes lower than the previous day’s low, it is forming a classic top pattern on the charts. What is that pattern called? Key reversal
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This note was uploaded on 02/19/2012 for the course BIP 364 taught by Professor Stephenlevin during the Fall '10 term at Northwestern.

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Final Exam Key - Final Exam Financial Markets in the Global...

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