Exam 19: Commodity and Financial Futures

If an individual expected securities prices to fall, that investor could 1. buy put options 2. sell a stock index futures contract 3. sell stock short

An important advantage offered investors (speculators)by futures contracts is the large amount of leverage.

A currency swap is an agreement to convert payments in a foreign currency to payments in the domestic currency.

If speculators anticipate interest rates will rise, they enter into contracts to sell bonds.

The amount of margin required to enter into a futures contract is at least 50 percent of the value of the contract.

Entering a futures contract to sell corn is a long position.

A futures contract to take delivery is canceled by