Ch17 - Futures Markets 1. Over the last 15 years, most of...

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Futures Markets 1. Over the last 15 years, most of the growth in the number of contracts traded on the Chicago Board of Trade has come in the _______. a. metals b. agricultures c. financials d. commodities 2. A person with a long position in a commodity futures contract wants the price of the commodity to ______. a. decrease substantially b. increase substantially c. remain unchanged
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d. increase or decrease substantially 3. 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 4. The clearing corporation has a net position equal to ______. a. the open interest b. the open interest times two
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c. the open interest divided by two d. zero 5. The S&P500 index futures contract is an example of a(n) ______ delivery contract. The pork bellies contract is an example of a(n) ______ delivery contract. a. cash, cash b. cash, actual c. actual, cash d. actual, actual 6. The CME weather derivatives have payoffs that depend on ____ . a. the number of cloudy days for a specific city in a given month
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b. the number of inches of rain for a specific city in a given month c. the number of degree-days by which the temperature in a region differs from 65 degrees Fahrenheit d. none of the above 7. Synthetic stock positions are commonly used by ______ because of their ______. a. market timers, lower transaction cost b. banks, lower risk c. wealthy investors, tax treatment d. all of the above 8. The Fridays with simultaneous expiration of S&P index futures, S&P index options and options on some individual stocks are commonly called the _______.
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a. mad minutes b. trifectas c. happy hours d. triple-witching hours 9. 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
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10. An investor who is hedging a corporate bond portfolio using a T-bond futures contract is said to have a(n) _______. a. arbitrage b. cross-hedge c. over-hedge d. spread-hedge 11. 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
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silver futures contracts traded the previous day 12. 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 13. Futures and forward contracts differ in all of the following ways except _______________. a.
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Ch17 - Futures Markets 1. Over the last 15 years, most of...

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