Reading 72: Futures Markets and Contracts - LOS a, (Part following, class, black, forward

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6.Which of the following is NOT a feature that distinguishes futures contracts from forward contracts? Futures contracts:

A)   trade in a secondary market.

B)   are regulated by the government.

C)   are not customized securities.

D)   cover a specific quantity of the underlying asset.

7.Which of the following statements regarding forwards and futures is FALSE?

A)   Unlike forwards, futures are always deliverable contracts.

B)   Unlike futures, forwards carry counterparty risk.

C)   Like futures, forwards are priced to have zero value at contract initiation.

D)   Unlike forwards, futures trade in organized secondary markets.

8.Which of the following statements regarding both futures contracts and forward contracts is FALSE?

A)   They carry counterparty risk.

B)   For deliverable contracts, the short must deliver the underlying asset at a future date.

C)   For a cash settlement contract, the short receives a payment if the spot price is below the futures price at contract settlement.

D)   They are priced to have zero value at the initiation of the contract.

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答案和详解如下：

6.Which of the following is NOT a feature that distinguishes futures contracts from forward contracts? Futures contracts:

A)   trade in a secondary market.

B)   are regulated by the government.

C)   are not customized securities.

D)   cover a specific quantity of the underlying asset.

The correct answer was D)

Both futures contracts and forward contracts cover a specific quantity of the underlying asset. The other characteristics only apply to futures contracts.

7.Which of the following statements regarding forwards and futures is FALSE?

A)   Unlike forwards, futures are always deliverable contracts.

B)   Unlike futures, forwards carry counterparty risk.

C)   Like futures, forwards are priced to have zero value at contract initiation.

D)   Unlike forwards, futures trade in organized secondary markets.

The correct answer was A)

There are both deliverable and cash settlement futures contracts, just as with forwards.

8.Which of the following statements regarding both futures contracts and forward contracts is FALSE?

A)   They carry counterparty risk.

B)   For deliverable contracts, the short must deliver the underlying asset at a future date.

C)   For a cash settlement contract, the short receives a payment if the spot price is below the futures price at contract settlement.

D)   They are priced to have zero value at the initiation of the contract.

The correct answer was A)

The clearinghouse of the futures exchange is the counterparty to all futures contracts so that, unlike forward contracts, counterparty risk is not a concern with futures contracts.