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Quiz 7 Chapter 17
and 18
Chapter 17:
___________________________________________________________________________
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1.
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Today's futures
markets are dominated by trading in _______ contracts.
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2.
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A person with a long
position in a commodity futures contract wants the price of the commodity to
______.
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A.
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decrease
substantially
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B.
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increase
substantially
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D.
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increase or
decrease substantially
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3.
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If an asset price
declines, the investor with a _______ is exposed to the largest potential
loss.
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D.
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short futures
contract
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4.
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The clearing
corporation has a net position equal to ______.
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B.
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the open interest
times 2
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C.
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the open interest
divided by 2
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5.
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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.
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6.
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Which one of the
following contracts requires no cash to change hands when initiated?
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B.
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Short futures
contract
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7.
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Synthetic stock
positions are commonly used by ______ because of their ______.
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A.
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market timers;
lower transaction cost
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C.
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wealthy investors;
tax treatment
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D.
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money market funds;
limited exposure
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8.
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_____________ are
likely to close their positions before the expiration date, while
____________ are likely to make or take delivery.
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9.
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Futures contracts
have many advantages over forward contracts except that _________.
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A.
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futures positions
are easier to trade
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B.
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futures contracts
are tailored to the specific needs of the investor
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C.
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futures trading
preserves the anonymity of the participants
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D.
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counterparty credit
risk is not a concern on futures
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10.
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An investor who is
hedging a corporate bond portfolio using a T-bond futures contract is said to
have _______.
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