FIN 320 Week 9 Quiz – Strayer



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Quiz 7 Chapter 17 and 18
Chapter 17: ___________________________________________________________________________
1.
Today's futures markets are dominated by trading in _______ contracts. 
 

A. 
metals

B. 
agriculture

C. 
financial

D. 
commodity

2.
A person with a long position in a commodity futures contract wants the price of the commodity to ______. 
 

A. 
decrease substantially

B. 
increase substantially

C. 
remain unchanged

D. 
increase or decrease substantially

3.
If an asset price declines, the investor with a _______ is exposed to the largest potential loss. 
 

A. 
long call option

B. 
long put option

C. 
long futures contract

D. 
short futures contract

4.
The clearing corporation has a net position equal to ______. 
 

A. 
the open interest

B. 
the open interest times 2

C. 
the open interest divided by 2

D. 
zero

5.
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. 
 

A. 
cash; cash

B. 
cash; actual

C. 
actual; cash

D. 
actual; actual

6.
Which one of the following contracts requires no cash to change hands when initiated? 
 

A. 
Listed put option

B. 
Short futures contract

C. 
Forward contract

D. 
Listed call option

7.
Synthetic stock positions are commonly used by ______ because of their ______. 
 

A. 
market timers; lower transaction cost

B. 
banks; lower risk

C. 
wealthy investors; tax treatment

D. 
money market funds; limited exposure

8.
_____________ are likely to close their positions before the expiration date, while ____________ are likely to make or take delivery. 
 

A. 
Investors; regulators

B. 
Hedgers; speculators

C. 
Speculators; hedgers

D. 
Regulators; investors

9.
Futures contracts have many advantages over forward contracts except that _________. 
 

A. 
futures positions are easier to trade

B. 
futures contracts are tailored to the specific needs of the investor

C. 
futures trading preserves the anonymity of the participants

D. 
counterparty credit risk is not a concern on futures


10.
An investor who is hedging a corporate bond portfolio using a T-bond futures contract is said to have _______. 
 

A. 
an arbitrage

B. 
a cross-hedge

C. 
an over hedge

D. 
a spread hedge

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