Podcast
Questions and Answers
Which one of the following best describes a long forward position?
Which one of the following best describes arbitrage?
What is the difference between selling a call option and buying a put option?
According to the text, when you buy a put option, the payoff is
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In problem 1.6, if the cotton price at the end of the contract is 48.20 cents per pound, how much does the trader gain or lose?
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Which market quotes prices as the number of US dollars per unit of foreign currency?
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What is the purpose of margins in futures contracts?
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What are the most important aspects of designing a new futures contract?
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What does a stop order to sell at $2 mean?
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Which of the following is true about an exchange-traded stock option?
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What is the purpose of a futures contract?
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Under what circumstances will the holder of a March call option to buy a share for $50 make a profit?
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Under what circumstances will the seller of a June put option to sell a share for $60 make a profit?
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According to the text, if the futures price of a commodity is greater than the spot price during the delivery period, what can an arbitrageur do to make an immediate profit?
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What happens if the futures price is less than the spot price during the delivery period?
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What strategy may companies interested in acquiring the asset use if the futures price is less than the spot price during the delivery period?
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What is the total payoff from the two contracts entered into on July 1, 2011 and September 1, 2011?
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What is the open interest of a futures contract?
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Which of the following is a way to hedge exchange rate risk for a US company that expects to pay 1 million Canadian dollars in six months?
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If the exchange rate at the end of a short forward contract on 100 million yen is $0.0074 per yen, how much does the trader gain or lose?
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Which of the following is NOT a likely reason for investors to use a futures contract on long-term Treasury bonds?
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What does it mean when someone says that options and futures are zero-sum games?
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