Exam 9: Derivatives: Futures, Options, and Swaps

With a put option, what specifically does the option holder receive for the price paid for the option?

Explain the concept of notional principal used in swaps.

If a futures contract for U.S.Treasury bonds decreases by "17" in the financial page listings, the price of the contract decreased by:

A call option described as out of the money would find:

A wheat farmer who must purchase his inputs now but will sell his wheat at a market price at a future date:

With a futures contract:

Considering a put option; if the price of the underlying asset increases:

The short position in a futures contract is the party that will:

Users of commodities are:

Explain how an interest rate futures contract differs from an outright purchase of a bond.

The process of marking to market:

Identify four factors that will cause the value of put options to decrease.

On the settlement date of a futures contract:

A call option is:

Consider a call option; in terms of the option writer and option holder, who is the buyer? Who is the seller? Finally, who has the option? Explain.

Considering interest-rate swaps, the swap spread is:

How can we link the lack of futures markets in poor countries to the fact that farmers in poor countries are likely to remain poor?

There is a futures contract for the purchase of 1000 bushels of corn at $3.00 per bushel.If the market price of corn falls to $2.50:

At expiration, the time value of an option:

A put option that is described as in the money would find: