Reading 72: Futures Markets and Contracts - LOS d ～ Q1-5

答案和详解如下：

1.Prior to contract expiration the short in a futures contract can avoid futures exposure by:

A)   an exchange-for-physicals.

B)   paying a cash settlement amount.

C)   entering into a reversing trade.

D)   delivering the asset at the current spot price.

The correct answer was C)

Prior to expiration, a futures position (long or short) is closed out by an offsetting/reversing trade. The other methods are used to settle positions at contract expiration.

2.Which method is NOT an appropriate way to close out a futures contract?

A)   Delivery.

B)   Default.

C)   Reverse trade.

D)   Exchange for physicals.

The correct answer was B)

Default is failure to perform as required under the contract.

3.All of the following are methods to close out a futures position EXCEPT:

A)   delivery of the underlying commodity.

B)   engaging in an offsetting trade in the futures market.

C)   allowing the contract to expire without taking action.

D)   through an exchange for physicals with another trader.

The correct answer was C)

A futures contract cannot expire without any action being taken. If the contract has not been closed out through an offsetting trade, then one party must deliver the underlying commodity and the other party must purchase the commodity.

4.Which of the following statements about closing a futures position is least accurate?

A)   Few futures positions are settled by delivery of cash or assets.

B)   Except for exchange for physicals (EFP) transactions, futures contracts must be closed on the exchange floor.

C)   As maturity of a contract approaches, more and more traders will attempt to close their positions.

D)   Closing a position through delivery refers exclusively to the physical delivery of goods.

The correct answer was D)

Delivery can also occur through cash settlement of gains and losses. The other statements are true. Approximately one percent of futures transactions are closed through actual delivery or cash settlement.

5.Which of the following statements about closing a futures position through delivery is most accurate?

A)   Delivery is also known as exchange for physicals (EFP).

B)   Delivery can occur through the clearinghouse or by private party negotiation.

C)   Depending on the wording of the contract, a trader may close a contract by either delivering the goods to a designated location or by making a cash settlement of any gains or losses.

D)   Although the popularity of physical delivery has decreased over time, delivery by cash settlement remains the most popular method of closing a futures position.

The correct answer was C)

The other statements are false.

Physical deliveries and cash settlements combined represent less than one percent of all settlements.

An exchange for physicals differs from a delivery in that:

§ The traders actually exchange the goods.

§ The contract is not closed on the floor of the exchange.

§ The two traders privately negotiate the terms of the transaction.

An offsetting, or reversing trade occurs through the clearinghouse.