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1. Today's futures markets are dominated by trading in _______ contracts.
2. A person with a long position in a commodity futures contract wants the price of the
commodity to ______.
3. If an asset price declines, the investor with a _______ is exposed to the largest potential
loss.
4. The clearing corporation has a net position equal to ______.
5. The S&P 500 Index futures contract is an example of a(n) ______ delivery contract. The
pork bellies contract is an example of a(n) ______ delivery contract.
6. Which one of the following contracts requires no cash to change hands when initiated?
7. Synthetic stock positions are commonly used by ______ because of their ______.
8. _____________ are likely to close their positions before the expiration date, while
____________ are likely to make or take delivery.
9. Futures contracts have many advantages over forward contracts except that _________.
10. An investor who is hedging a corporate bond portfolio using a T-bond futures contract is
said to have _______.
11. The open interest on silver futures at a particular time is the number of __________.
12. An investor who goes short in a futures contract will _____ any increase in value of the
underlying asset and will _____ any decrease in value in the underlying asset.
13. An investor who goes long in a futures contract will _____ any increase in value of the
underlying asset and will _____ any decrease in value in the underlying asset.
14. The advantage that standardization of futures contracts brings is that _____ is improved
because ____________________.
15. The fact that the exchange is the counterparty to every futures contract issued is
important because it eliminates _________ risk.
16. In the futures market the short position's loss is ___________ the long position's gain.
17. A wheat farmer should __________ in order to reduce his exposure to risk associated with
fluctuations in wheat prices.
18. Which of the following provides the profit to a long position at contract maturity?
19. 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 __________.
20. Interest rate futures contracts exist for all of the following
except
__________.
21. Initial margin is usually set in the region of ________ of the total value of a futures
contract.
22. Margin must be posted by ________.
23. The daily settlement of obligations on futures positions is called _____________.
24. Which of the following provides the profit to a short position at contract maturity?
25. Margin requirements for futures contracts can be met by ______________.
26. An established value below which a trader's margin may not fall is called the ________.
27. Which one of the following is a true statement?
28. At maturity of a futures contract, the spot price and futures price must be approximately
the same because of __________.
29. A futures contract __________.
30. Which one of the following exploits differences between actual future prices and their
theoretically correct parity values?
31. Which one of the following refers to the daily settlement of obligations on future
positions?
32. The most actively traded interest rate futures contract is for ___________.
33. The CME weather futures contract is an example of ______________.
34. Single stock futures, as opposed to stock index futures, are _______________.
35. You are currently long in a futures contract. You instruct a broker to enter the short side of
a futures contract to close your position. This is called __________.
36. A company that mines bauxite, an aluminum ore, decides to short aluminum futures. This
is an example of __________ to limit its risk.
37. Futures markets are regulated by the __________.
38. A hog farmer decides to sell hog futures. This is an example of __________ to limit risk.
39. On May 21, 2012, you could have purchased a futures contract from Intrade for a price of
$5.70 that would pay you $10 if Barack Obama won the 2012 presidential election. This tells you
_____.
40. An investor would want to __________ to exploit an expected fall in interest rates.
41. Forward contracts _________ traded on an organized exchange, and futures contracts
__________ traded on an organized exchange.
42. If the S&P 500 Index futures contract is overpriced relative to the spot S&P 500 Index, you
should __________.
43. A long hedge is a simultaneous __________ position in the spot market and a __________
position in the futures market.
44. Investors who take short positions in futures contract agree to ___________ delivery of the
commodity on the delivery date, and those who take long positions agree to __________ delivery of
the commodity.
45. An investor would want to __________ to hedge a long position in Treasury bonds.
46. Futures contracts are said to exhibit the property of convergence because
_______________.
47. In the context of a futures contract, the basis is defined as ______________.
48. The __________ is among the world's largest derivatives exchanges and operates a fully
electronic trading and clearing platform.
49. Violation of the spot-futures parity relationship results in _______________.
50. When dividend-paying assets are involved, the spot-futures parity relationship can be
stated as _________________.
