Chapter 2 mechanics of futures markets

Suppose that in September a company sells a March orange juice futures contract for cents per pound. A This flexibility tends increase the futures price B This flexibility tends decrease the futures price C This flexibility may increase and may decrease the futures price D This flexibility has no effect on the futures price 4 A company enters into a short futures contract to sell 50, units of a commodity for 70 cents per unit.

How is it realized? A Both forward and futures contracts are traded on exchanges B Forward contracts are traded on exchanges, but futures contracts are not C Futures contracts are traded on exchanges, but forward contracts are not D Neither futures contracts nor forward contracts are traded on exchanges 2 Which of the following is NOT true?

The company has a December year end.

Which of the following is true? The company has a December year end. In Februarythe futures price is cents. Why does the open interest usually decline during the month preceding the delivery month? Trader B enters in a forward contract to do the same thing.

Of the 2, sellers, 1, were closing out positions and were entering into new positions. Suppose that in September a company sells a March orange juice futures contract for cents per pound.

How is it realized? It closes out its position on January 21, What is the futures price per unit above which there will be a margin call? A Futures contracts nearly always last longer than forward contracts B Futures contracts are standardized; forward contracts are not C Delivery or final cash settlement usually takes place with forward contracts; the same is not true of futures contracts D Forward contracts usually have one specified delivery date; futures contract often have a range of delivery dates 3 In the corn futures contract a number of different types of corn can be delivered with price adjustments specified by the exchange and there are a number of different delivery locations.

CHAPTER 2 Mechanics of Futures Markets

The exchange dollars per euro declines sharply during the first two months and then increases for the third month to close at 1.

What is the resultant change in the open interest? One contract is for the delivery of 40, pounds of cattle. A This flexibility tends increase the futures price B This flexibility tends decrease the futures price C This flexibility may increase and may decrease the futures price D This flexibility has no effect on the futures price 4 A company enters into a short futures contract to sell 50, units of a commodity for 70 cents per unit.

Further Questions Problem 2. What is the profit?

The futures price per pound is What is the accounting and tax treatment of the transaction is the company is classified as a a hedger and b a speculator? What is the profit? What is the futures price per unit above which there will be a margin call?

The futures price per pound is What are the advantages to the financial system of requiring all standardized derivatives transactions to be cleared through CCPs?

Assume that the company has a December 31 year end. View solution to the question:1) Which of the following is true? A) Both forward and futures contracts are traded on exchanges. B) Forward contracts are traded on exchanges, but futures contracts are not/5.

View Essay - Answers - Chapter 2 Problems from FINANCE 3 at Gustavus Adolphus College. CHAPTER 2 Mechanics of Futures Markets Practice Questions Problem The party with a short position in a%(9). View Test Prep - Chapter 2 Quiz Questions from MKT at Catholic University of America. Chapter 2: Mechanics of Futures Markets Multiple Choice Test Bank: Question with Answers 1.

Which of the97%(34).

Chapter 2 Mechanics of Futures Markets

Test Bank: Chapter 2 Mechanics of Futures and Forward Markets 1. Which of the following is true (circle one) (a) Both forward and futures contracts are. Start studying Chapter 2 - Mechanics of Futures Markets. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Margin Cash Flows!

A trader has to bring the balance in the margin account up to the initial margin when it falls below the maintenance margin level.

Download
Chapter 2 mechanics of futures markets
Rated 4/5 based on 21 review