Chapter 22 Futures Markets Answer Key
Multiple Choice Questions
1.
A futures contract
2.
The terms of futures contracts __________ standardized, and the terms of forward
contracts __________ standardized.
3.
Futures contracts __________ traded on an organized exchange, and forward contracts
__________ traded on an organized exchange.
4.
In a futures contract the futures price is
5.
The buyer of a futures contract is said to have a __________ position, and the seller of a
futures contract is said to have a __________ position in futures.
6.
Investors who take long positions in futures agree to __________ of the commodity on the
delivery date, and those who take the short positions agree to __________ of the
commodity.
7.
The terms of futures contracts such as the quality and quantity of the commodity and the
delivery date are
8.
A trader who has a __________ position in wheat futures believes the price of wheat will
__________ in the future.
9.
A trader who has a __________ position in gold futures wants the price of gold to
__________ in the future.
10.
The open interest on silver futures at a particular time is the
11.
Which one of the following statements regarding delivery is true?
12.
Which of the following statements regarding delivery is false?
I) Most futures contracts result in actual delivery.
II) Only 1% to 3% of futures contracts result in actual delivery.
III) Only 15% of futures contracts result in actual delivery.
13.
You hold one long corn futures contract that expires in April. To close your position in corn
futures before the delivery date you must
14.
Which one of the following statements is true?
15.
Which of the following statements is false?
I) The maintenance margin is the amount of money you post with your broker when you
buy or sell a futures contract.
II) If the value of the margin account falls below the maintenance margin requirement, the
holder of the contract will receive a margin call.
III) A margin deposit can only be met with cash.
IV) All futures contracts require the same margin deposit.
16.
Financial futures contracts are actively traded on the following indices except
17.
Financial futures contracts are actively traded on which of the following indices?
18.
Agricultural futures contracts are actively traded on
19.
Agricultural futures contracts are actively traded on
20.
Agricultural futures contracts are actively traded on
21.
Agricultural futures contracts are actively traded on
22.
Foreign currency futures contracts are actively traded on the
23.
Foreign currency futures contracts are actively traded on the
24.
Metals and energy currency futures contracts are actively traded on
25.
Metals and energy currency futures contracts are actively traded on
26.
Interest rate futures contracts are actively traded on the
27.
To exploit an expected increase in interest rates, an investor would most likely
28.
An investor with a long position in Treasury notes futures will profit if
29.
To hedge a long position in Treasury bonds, an investor most likely would
30.
An increase in the basis will __________ a long hedger and __________ a short hedger.
31.
Which one of the following statements regarding “basis” is not true?
32.
Which one of the following statements regarding “basis” is true?