Exam 22: Futures Markets

You sold one soybean future contract at $5.13 per bushel.What would be your profit (loss) at maturity if the wheat spot price at that time were $5.26 per bushel Assume the contract size is 5,000 ounces and there are no transactions costs.

You purchased one wheat future contract at $3.04 per bushel.What would be your profit (loss) at maturity if the wheat spot price at that time were $2.98 per bushel Assume the contract size is 5,000 ounces and there are no transactions costs.

Financial futures contracts are actively traded on the following indices except

To exploit an expected decrease in interest rates, an investor would most likely

If you determine that the S&P 500 Index futures is overpriced relative to the spot S&P 500 Index, you could make an arbitrage profit by

Given a stock index with a value of $1,000, an anticipated dividend of $30, and a risk-free rate of 6%, what should be the value of one futures contract on the index

A futures contract

Futures contracts are regulated by

Normal backwardation

Which one of the following statements regarding "basis" is not true

An investor with a short position in Treasury notes futures will profit if

You purchased one silver future contract at $3 per ounce.What would be your profit (loss) at maturity if the silver spot price at that time is $4.10 per ounce Assume the contract size is 5,000 ounces and there are no transactions costs.

On January 1, you bought one April S&P 500 index futures contract at a futures price of 1,420.If on February 1 the April futures price were 1,430, what would be your profit (loss) if you closed your position (without considering transactions costs)

If you took a long position in a pork bellies futures contract and then forgot about it, what would happen at the expiration of the contract

Which one of the following statements regarding "basis" is true

Given a stock index with a value of $1,500, an anticipated dividend of $62 and a risk-free rate of 5.75%, what should be the value of one futures contract on the index

If a trader holding a long position in corn futures fails to meet the obligations of a futures contract, the party that is hurt by the failure is

Given a stock index with a value of $1,200, an anticipated dividend of $45, and a risk-free rate of 6%, what should be the value of one futures contract on the index

Which of the following is false about profits from futures contracts I. The person with the long position gets to decide whether to exercise the futures contract and will only do so if there is a profit to be made. II. It is possible for both the holder of the long position and the holder of the short position to earn a profit. III. The clearinghouse makes most of the profit. IV. The amount that the holder of the long position gains must equal the amount that the holder of the short position loses.

Foreign currency futures contracts are actively traded on the