TB Chapter 08
CHAPTER 8: STRUCTURE OF FORWARD AND FUTURES MARKETS
MULTIPLE CHOICE TEST QUESTIONS
1. Which of the following is a false statement related to options on futures? a. options on futures are also known as futures options b. options on futures are also known as options on the underlying instrument c. options on futures is a derivative on a derivative d. options on futures are also known as commodity options e. all of the above statements are true related to options on futures
2. Which of the following contract terms is not set by the futures exchange? a. the dates on which delivery can occur b. the expiration months c. the deliverable commodities d. the size of the contract e. the price
3. Which of the following organizations has the ultimate regulatory authority in the futures industry? a. National Futures Association b. Commodity Futures Trading Commission c. Commodity Exchange Authority d. Securities and Exchange Commission e. none of the above
4. Margin in a futures transaction differs from margin in a stock transaction because 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
5. If the initial margin is $5,000, the maintenance margin is $3,500 and your balance is $4,000, how much must you deposit? a. $6,000 b. $1,500 c. $9,000 d. nothing e. none of the above
6. If the initial margin is $5,000, the maintenance margin is $3,500 and your balance is $3,100, how much must you deposit? a. $1,500 b. $400 c. $1,900 d. 0 e. none of the above
7. The number of long or short futures positions outstanding is called the a. reportable position b. minimum volume c. open interest d. spread position e. none of the above
8. Most futures contracts are closed by a. delivery b. offset c. exercise d. default
e. none of the above
9. Most forward contracts are closed by a. delivery b. offset
MULTIPLE CHOICE TEST QUESTIONS
1. Which of the following is a false statement related to options on futures? a. options on futures are also known as futures options b. options on futures are also known as options on the underlying instrument c. options on futures is a derivative on a derivative d. options on futures are also known as commodity options e. all of the above statements are true related to options on futures
2. Which of the following contract terms is not set by the futures exchange? a. the dates on which delivery can occur b. the expiration months c. the deliverable commodities d. the size of the contract e. the price
3. Which of the following organizations has the ultimate regulatory authority in the futures industry? a. National Futures Association b. Commodity Futures Trading Commission c. Commodity Exchange Authority d. Securities and Exchange Commission e. none of the above
4. Margin in a futures transaction differs from margin in a stock transaction because 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
5. If the initial margin is $5,000, the maintenance margin is $3,500 and your balance is $4,000, how much must you deposit? a. $6,000 b. $1,500 c. $9,000 d. nothing e. none of the above
6. If the initial margin is $5,000, the maintenance margin is $3,500 and your balance is $3,100, how much must you deposit? a. $1,500 b. $400 c. $1,900 d. 0 e. none of the above
7. The number of long or short futures positions outstanding is called the a. reportable position b. minimum volume c. open interest d. spread position e. none of the above
8. Most futures contracts are closed by a. delivery b. offset c. exercise d. default
e. none of the above
9. Most forward contracts are closed by a. delivery b. offset