Question 1

Futures funds have typically provided outstanding returns to their investors.

Accepted Answer

A) True 
 B)False

Question 2

One party to a futures transaction does not bear the risk that the other party will default.

Accepted Answer

A) True 
 B)False

Question 3

Many futures contracts specify that there are several grades of a commodity that are acceptable for delivery.

Accepted Answer

A) True 
 B)False

Question 4

What are circuit breakers?

Accepted Answer

A) rules that stop trading when futures are about to expire 
B) a system that shuts down the exchange computer during periods of abnormal volume 
C) limits on the number of contracts that can be traded on high volume days 
D) rules that limit the number of contracts a speculator can hold 
E) none of the above 
A) rules that stop trading when futures are about to expire 
B) a system that shuts down the exchange computer during periods of abnormal volume 
C) limits on the number of contracts that can be traded on high volume days 
D) rules that limit the number of contracts a speculator can hold 
E) none of the above

Question 5

Which of the following is not a futures exchange?

Accepted Answer

A) Minneapolis Grain Exchange 
B) CBOE Futures Exchange 
C) Chicago Climate Exchange 
D) Kansas City Board of Trade 
E) MidAmerica Commodity Exchange 
A) Minneapolis Grain Exchange 
B) CBOE Futures Exchange 
C) Chicago Climate Exchange 
D) Kansas City Board of Trade 
E) MidAmerica Commodity Exchange

Question 6

Which of the following duties is not performed by the clearinghouse?

Accepted Answer

A) holding margin deposits 
B) guaranteeing performance of buyer and writer 
C) maintaining records of transactions 
D) lending money to meet margin requirements 
E) none of the above 
A) holding margin deposits 
B) guaranteeing performance of buyer and writer 
C) maintaining records of transactions 
D) lending money to meet margin requirements 
E) none of the above

Question 7

Which of the following is not a forward contract?

Accepted Answer

A) a long-term employment contract at a fixed salary 
B) an automobile lease non-cancelable for three years 
C) a rain check 
D) a signed contract to buy a house in six months 
E) none of the above 
A) a long-term employment contract at a fixed salary 
B) an automobile lease non-cancelable for three years 
C) a rain check 
D) a signed contract to buy a house in six months 
E) none of the above

Question 8

A limit move is when a futures price reaches its all time high or low price.

Accepted Answer

A) True 
 B)False

Question 9

One of the advantages of forward markets is

Accepted Answer

A) performance is guaranteed by the G-30 
B) trading is conducted in the evening over computers 
C) the contracts are private and customized 
D) trading is less costly and governed by more rules 
E) none of the above 
A) performance is guaranteed by the G-30 
B) trading is conducted in the evening over computers 
C) the contracts are private and customized 
D) trading is less costly and governed by more rules 
E) none of the above

Question 10

The largest futures exchange in the United States is the Chicago Mercantile Exchange.

Accepted Answer

A) True 
 B)False

Question 11

Futures trades are executed in the pit.

Accepted Answer

A) True 
 B)False

Question 12

The clearinghouse is the middleman in a futures trade.

Accepted Answer

A) True 
 B)False

Question 13

The most actively traded futures contract on a short-term financial instrument is Treasury bill futures.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a trader on the floor of the futures exchange?

Accepted Answer

A) introducing broker 
B) commission broker 
C) commodity trading advisor 
D) commodity pool operator 
E) none of the above 
A) introducing broker 
B) commission broker 
C) commodity trading advisor 
D) commodity pool operator 
E) none of the above

Question 15

Margin in a futures transaction differs from margin in a stock transaction because

Accepted Answer

A) stock transactions are much smaller 
B) delivery occurs immediately in a stock transaction 
C) no money is borrowed in a futures transaction 
D) futures are much more volatile 
E) none of the above 
A) stock transactions are much smaller 
B) delivery occurs immediately in a stock transaction 
C) no money is borrowed in a futures transaction 
D) futures are much more volatile 
E) none of the above

Question 16

Trading as both a broker and a dealer is called

Accepted Answer

A) dual trading 
B) spreading 
C) scalping 
D) arbitraging 
E) none of the above 
A) dual trading 
B) spreading 
C) scalping 
D) arbitraging 
E) none of the above

Question 17

Because futures markets do not have designated market makers,there is no such thing as a bid-ask spread.

Accepted Answer

A) True 
 B)False

Question 18

Stock index futures contracts are terminated by delivery the portfolio of stocks represented by the index.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not a method of terminating a futures contract?

Accepted Answer

A) offset 
B) delivery 
C) exchange for physicals 
D) scalping 
E) none of the above 
A) offset 
B) delivery 
C) exchange for physicals 
D) scalping 
E) none of the above

Question 20

Which is the most active group of futures?

Accepted Answer

A) energy 
B) agriculture 
C) currency 
D) financials 
E) none of the above 
A) energy 
B) agriculture 
C) currency 
D) financials 
E) none of the above

Futures funds have typically provided outstanding returns to their investors.

One party to a futures transaction does not bear the risk that the other party will default.

Many futures contracts specify that there are several grades of a commodity that are acceptable for delivery.

What are circuit breakers?

Which of the following is not a futures exchange?

Which of the following duties is not performed by the clearinghouse?

Which of the following is not a forward contract?

A limit move is when a futures price reaches its all time high or low price.

One of the advantages of forward markets is

The largest futures exchange in the United States is the Chicago Mercantile Exchange.

Futures trades are executed in the pit.

The clearinghouse is the middleman in a futures trade.

The most actively traded futures contract on a short-term financial instrument is Treasury bill futures.

Which of the following is a trader on the floor of the futures exchange?

Margin in a futures transaction differs from margin in a stock transaction because

Trading as both a broker and a dealer is called

Because futures markets do not have designated market makers,there is no such thing as a bid-ask spread.

Stock index futures contracts are terminated by delivery the portfolio of stocks represented by the index.

Which of the following is not a method of terminating a futures contract?

Which is the most active group of futures?

Introduction

Structure of Options Markets

Principles of Option Pricing

Option Pricing Models: the Binomial Model

Option Pricing Models: the Black-Scholes-Merton Model

Basic Option Strategies

Advanced Option Strategies

Principles of Pricing Forwards, Futures, and Options on Futures

Futures Arbitrage Strategies

Forward and Futures Hedging, Spread, and Target Strategies

Swaps

Interest Rate Forwards and Options

Advanced Derivatives and Strategies

Financial Risk Management Techniques and Applications

Managing Risk in an Organization

Filters

Exam 8: The Structure of Forward and Futures Markets

Futures funds have typically provided outstanding returns to their investors.

One party to a futures transaction does not bear the risk that the other party will default.

Many futures contracts specify that there are several grades of a commodity that are acceptable for delivery.

What are circuit breakers?

Which of the following is not a futures exchange?

Which of the following duties is not performed by the clearinghouse?

Which of the following is not a forward contract?

A limit move is when a futures price reaches its all time high or low price.

One of the advantages of forward markets is

The largest futures exchange in the United States is the Chicago Mercantile Exchange.

Futures trades are executed in the pit.

The clearinghouse is the middleman in a futures trade.

The most actively traded futures contract on a short-term financial instrument is Treasury bill futures.

Which of the following is a trader on the floor of the futures exchange?

Margin in a futures transaction differs from margin in a stock transaction because

Trading as both a broker and a dealer is called

Because futures markets do not have designated market makers,there is no such thing as a bid-ask spread.

Stock index futures contracts are terminated by delivery the portfolio of stocks represented by the index.

Which of the following is not a method of terminating a futures contract?

Which is the most active group of futures?

Introduction

Structure of Options Markets

Principles of Option Pricing

Option Pricing Models: the Binomial Model

Option Pricing Models: the Black-Scholes-Merton Model

Basic Option Strategies

Advanced Option Strategies

Principles of Pricing Forwards, Futures, and Options on Futures

Futures Arbitrage Strategies

Forward and Futures Hedging, Spread, and Target Strategies

Swaps

Interest Rate Forwards and Options

Advanced Derivatives and Strategies

Financial Risk Management Techniques and Applications

Managing Risk in an Organization

Filters