Reading 72: Futures Markets and Contracts - LOS d ～ Q6-11

答案和详解如下：

6.An exchange-for-physicals, as it pertains to futures contracts:

A)   is another term for delivering an asset to satisfy a futures contract.

B)   is another term for accepting delivery of an asset to satisfy a futures contract.

C)   involves an agreement off the floor of the exchange.

D)   is not permitted for financial futures.

The correct answer was C)

An exchange-for-physicals involves an agreement between long and short contract holders to settle their respective obligations by delivery and purchase of an asset. It is executed off the floor of the exchange and reported to exchange officials who then cancel both positions.

7.Most deliverable futures contracts are settled by:

A)   a cash payment at expiration.

B)   an offsetting trade.

C)   delivery of the asset at contract expiration.

D)   an exchange-for-physicals.

The correct answer was B)

Most futures positions are closed out by an offsetting trade at some point during life of the contract.

8.An offsetting trade is used to:

A)   close out a futures position prior to expiration.

B)   fully hedge a risk arising in the normal course of business activity.

C)   speculate in the futures market.

D)   partially hedge the interest rate risk of a bond position.

The correct answer was A)

An offsetting/reversing trade is used to close out a futures position prior to expiration.

9.Closing out a futures position prior to expiration:

A)   can only be done by the long.

B)   can be done by entering into an offsetting trade at the current futures price.

C)   removes price risk but not necessarily counterparty risk.

D)   is only possible if the counterparty agrees.

The correct answer was B)

Taking the opposite position in an equal number of contracts on the same asset with the same expiration date ends any further exposure under the original contract.

10.A long position in a deliverable futures contract can be terminated at expiration by all of the following EXCEPT:

A)   an equivalent cash settlement.

B)   an exchange-for-physicals.

C)   close-out at expiration.

D)   taking delivery.

The correct answer was A)

A deliverable contract does not permit equivalent cash settlement. Sale of an offsetting contract at the settlement price on the final day of trading (close-out at expiration) will have the same effect, with the cash settlement effectively taking place in the margin account.

11.Which of the following statements about closing a futures contract through offset is most accurate?

A)   A low percentage of offsets take place ex-pit.

B)   In an offset, or reversing trade, a trader makes an exact opposite trade (maturity, quantity, and good) to her current position, either through the clearinghouse or a private party.

C)   The clearinghouse nets the position to zero.

D)   Offset is the least common method of closing a futures position.

The correct answer was C)

An offset trade must be conducted on the floor of the exchange through the clearinghouse. Reverse, or offsetting, trades are the most common way to close a futures position. Exchange for physicals (EFP) involves private parties and takes place ex pit, or off the exchange floor.