Question 1

The difference between the cash price and the futures price is called:

Accepted Answer

A)  Bid-ask spread. 
B)  Income spread. 
C)  Basis. 
D)  Profit. 
E)  None of the above. 
A)  Bid-ask spread. 
B)  Income spread. 
C)  Basis. 
D)  Profit. 
E)  None of the above.

Question 2

The price of a futures contract is determined by:

Accepted Answer

A)  Supply and demand conditions. 
B)  Open outcry of bids and offers in an auction market. 
C)  The pit trader. 
D)  Locals. 
E)  None of the above. 
A)  Supply and demand conditions. 
B)  Open outcry of bids and offers in an auction market. 
C)  The pit trader. 
D)  Locals. 
E)  None of the above.

Question 3

The seller of a futures contract will realize a profit if the futures price:

Accepted Answer

A)  Increases. 
B)  Decreases. 
C)  Stays the same. 
D)  None of the above. 
E)  All of the above. 
A)  Increases. 
B)  Decreases. 
C)  Stays the same. 
D)  None of the above. 
E)  All of the above.

Question 4

Investors can use the cash or futures market to alter their risk exposure, which requires them to consider which of the following factors?

Accepted Answer

A)  Liquidity. 
B)  Transactions costs. 
C)  Taxes. 
D)  Leveraging aspect of futures. 
E)  All of the above. 
A)  Liquidity. 
B)  Transactions costs. 
C)  Taxes. 
D)  Leveraging aspect of futures. 
E)  All of the above.

Question 5

The role of the clearinghouse is to:

Accepted Answer

A)  Interpose itself as the buyer to every sale and the seller to every purchase. 
B)  Guarantee fulfillment of the futures contract on the settlement date. 
C)  Make it simple for parties to unwind their positions prior to the settlement date. 
D)  All of the above. 
E)  b and c only. 
A)  Interpose itself as the buyer to every sale and the seller to every purchase. 
B)  Guarantee fulfillment of the futures contract on the settlement date. 
C)  Make it simple for parties to unwind their positions prior to the settlement date. 
D)  All of the above. 
E)  b and c only.

The difference between the cash price and the futures price is called:

The price of a futures contract is determined by:

The seller of a futures contract will realize a profit if the futures price:

Investors can use the cash or futures market to alter their risk exposure, which requires them to consider which of the following factors?

The role of the clearinghouse is to:

Introduction

Overview of Market Participants and Financial Innovation

Depository Institutions

Insurance Companies

Asset Management Firms

Investment Banking Firms

Primary and Secondary Markets

Risk and Return Theories: I

Risk and Return Theories: II

Introduction to Options Markets

Introduction to the Swaps, Caps, and Floors Markets

Common Stock Market: I

Common Stock Market: II

Stock Options Market

The Market for Stock Index Products and Other Equity Derivatives

The Theory and Structure of Interest Rates

Valuation of Debt Contracts and Their Price Volatility Characteristics

The Term Structure of Interest Rates

Money Markets

Treasury and Agency Securities Markets

Corporate Senior Instruments Markets: I

Corporate Senior Instruments Markets: II

Municipal Securities Markets

The Residential Mortgage Market

The Market for Residential Mortgage-Backed Securities

Market for Asset-Backed Securities

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

International Bond Markets

International Bond Markets

Market for Interest Rate Risk Transfer Vehicles: OTC Instruments

The Market for Foreign Exchange and Risk Control Instruments

Filters

Exam 10: Introduction to Financial Futures Markets

The difference between the cash price and the futures price is called:

The price of a futures contract is determined by:

The seller of a futures contract will realize a profit if the futures price:

Investors can use the cash or futures market to alter their risk exposure, which requires them to consider which of the following factors?

The role of the clearinghouse is to:

Introduction

Overview of Market Participants and Financial Innovation

Depository Institutions

Insurance Companies

Asset Management Firms

Investment Banking Firms

Primary and Secondary Markets

Risk and Return Theories: I

Risk and Return Theories: II

Introduction to Options Markets

Introduction to the Swaps, Caps, and Floors Markets

Common Stock Market: I

Common Stock Market: II

Stock Options Market

The Market for Stock Index Products and Other Equity Derivatives

The Theory and Structure of Interest Rates

Valuation of Debt Contracts and Their Price Volatility Characteristics

The Term Structure of Interest Rates

Money Markets

Treasury and Agency Securities Markets

Corporate Senior Instruments Markets: I

Corporate Senior Instruments Markets: II

Municipal Securities Markets

The Residential Mortgage Market

The Market for Residential Mortgage-Backed Securities

Market for Asset-Backed Securities

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

International Bond Markets

International Bond Markets

Market for Interest Rate Risk Transfer Vehicles: OTC Instruments

The Market for Foreign Exchange and Risk Control Instruments

Filters