Exam 17: Derivative Assets

Purchase of a futures contract requires payment of _____ .

A football ticket is most similar to

The best known of the derivative assets are

An at-the-money option

For a futures contract to be successful, both _____ and _____ should be present.

After a company has finished hedging (futures) its price risk associated with raw materials, it closes the hedge by selling an equal number of futures contracts.

Eurodollars and T-bill futures are both short-term interest rate instruments.

Which of the following statements is most accurate?

Which of the following is not necessary to identify an option?

If the stock market rises substantially, the value of an S&P 500 futures contract should decline.

Everything else being equal, a T-bond with a high coupon has a

An important characteristic of options is

All of the following are common uses of derivatives except

Option striking prices are standardized in two dollar intervals.

Which of the following regarding T-bill futures contracts is incorrect?

An option that can be exercised anytime is a(n) _____ option.

Speculators use futures contracts to reduce risk.

Selling an option as an opening transaction is called

Foreign currency futures call for the delivery of foreign money at one of three banks in New York City.

Another name for a good faith deposit is performance bond.