Contango a holds that the natural hedgers are the

Info icon This preview shows pages 27–31. Sign up to view the full content.

View Full Document Right Arrow Icon
49. Contango A. holds that the natural hedgers are the purchasers of a commodity, not the suppliers. B. is a hypothesis polar to backwardation. C. holds that F O must be less than (P T ). D. A and C. E. A and B. Contango holds that the natural hedgers are the purchasers of a commodity, not the suppliers and is a hypothesis polar to backwardation. Difficulty: Easy 50. Delivery of stock index futures Stock index futures are cash-settled, similar to the procedure used for index options. Difficulty: Moderate 22-27
Image of page 27

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

View Full Document Right Arrow Icon
Chapter 22 - Futures Markets 51. The establishment of a futures market in a commodity should not have a major impact on spot prices because Losses and gains to futures contracts net to zero, and thus should not impact spot prices. Difficulty: Moderate 52. The most recently established category of futures contracts is Financial futures were first introduced in 1975, and this segment of the market has seen rapid innovation. Difficulty: Moderate 22-28
Image of page 28
Chapter 22 - Futures Markets 53. If a trader holding a long position in corn futures fails to meet the obligations of a futures contract, the party that is hurt by the failure is A. the offsetting short trader. B. the corn farmer. C. the clearinghouse. D. the broker. E. the commodities dealer. The clearinghouse acts as a middle party to every transaction, and bears any losses arising from failure to meet contractual obligations. Difficulty: Moderate 22-29
Image of page 29

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

View Full Document Right Arrow Icon
Chapter 22 - Futures Markets 54. Open interest includes Open interest is the number of contracts outstanding across all delivery dates for a given contract. Long and short positions are not counted separately, and the clearinghouse position is not counted because it nets to zero. Difficulty: Moderate
Image of page 30
Image of page 31
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern