Reading 72: Futures Markets and Contracts - LOS a, (Part

答案和详解如下：

6.The clearinghouse, in U.S. futures markets, does NOT:

A)   act as a counterparty in futures contracts.

B)   allow reversing trades.

C)   choose which assets will have futures contracts.

D)   guarantee performance of futures contract obligations.

The correct answer was C)

The exchange decides which contracts will be traded and their specifications. The clearinghouse acts as the counterparty to every contract, guarantees performance, and allows traders to end their obligations through reversing (offsetting) trades.

7.Which is the only type of commodity where trading in forward contracts is larger than trading with future contracts?

A)   Agricultural.

B)   Interest rate.

C)   Foreign currency.

D)   Metallurgical.

The correct answer was C)

Trading in foreign currency forwards is far larger than the trading in futures. For example, with international trade, businesses can hedge against adverse currency fluctuations. But each business arrangement is unique, and most require the flexibility of a forward, whose terms are not standardized, that meets their special needs.

8.Which of the following statements about the futures market is most accurate?

A)   Speculators trade to reduce some preexisting risk exposure.

B)   Hedgers accept market risk in exchange for expected profits.

C)   Open interest is the number of futures contracts for which delivery is currently obligated.

D)   If a trader's account falls below the maintenance margin level they have three days to bring it back up to the maintenance margin level.

The correct answer was C)

Open interest is the number of contracts currently in existence. The other statements are false. Speculators take risk for return. Hedgers are trying to reduce risk. You must bring the margin account up to the initial level by the next day's opening.

9.Which of the following statements about futures is least accurate?

A)   The exchange-mandated uniformity of futures contracts reduces their liquidity.

B)   The futures exchange specifies the minimum price fluctuation of a futures contract.

C)   Futures contracts have a maximum daily allowable price limit.

D)   Futures contracts always have standardized contract terms.

The correct answer was A)

The exchange-mandated uniformity of futures contracts increases their liquidity.

10.Which type of futures contract does NOT allow for the underlying goods to be delivered?

A)   Agricultural.

B)   Interest rate.

C)   Index.

D)   Foreign currency.

The correct answer was C)

The nature of an index future realistically prohibits settlement in the underlying commodity. For example, the Standard and Poor’s 500 stock index would require settlement in 500 different common stocks, in the exact proportion of the total value as exists in the index at expiration of the future. Agriculture, interest rate, and currency futures all involve deliverable commodities.