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QUESTION 1 Which entity in the United States takes primary responsibility for regulating futures market? a
QUESTION 1
- Which entity in the United States takes primary responsibility for regulating futures market?
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a. |
Federal Reserve Board |
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b. |
Commodities Futures Trading Commission (CFTC) |
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c. |
Security and Exchange Commission (SEC) |
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d. |
US Treasury |
10 points
QUESTION 2
- A speculator takes a long position in a futures contract on a commodity on November 1, 2012 to hedge an exposure on March 1, 2013. The initial futures price is $60. On December 31, 2012 the futures price is $61. On March 1, 2013 it is $64. The contract is closed out on March 1, 2013. What gain is recognized in the accounting year January 1 to December 31, 2013? Each contract is on 1000 units of the commodity.
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a. |
$0 |
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b. |
$1,000 |
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c. |
$3,000 |
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d. |
$4,000 |
10 points
QUESTION 3
- An investor has exchange-traded put options to sell 100 shares for $20. There is a $1 cash dividend. Which of the following is then the position of the investor?
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a. |
The investor has put options to sell 100 shares for $20. |
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b. |
The investor has put options to sell 100 shares for $19. |
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c. |
The investor has put options to sell 105 shares for $19. |
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d. |
The investor has put options to sell 105 shares for $19.05. |
10 points
QUESTION 4
- You sell one December futures contracts when the futures price is $1,010 per unit. Each contract is on 100 units and the initial margin per contract that you provide is $2,000. The maintenance margin per contract is $1,500. During the next day the futures price rises to $1,012 per unit. What is the balance of your margin account at the end of the day?
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a. |
$1,800 |
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b. |
$3,300 |
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c. |
$2,200 |
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d. |
$3,700 |
10 points
QUESTION 5
- Consider a put option and a call option with the same strike price and time to maturity. Which of the following is true?
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a. |
It is possible for both options to be in the money. |
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b. |
It is possible for both options to be out of the money. |
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c. |
One of the options must be in the money. |
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d. |
One of the options must be either in the money or at the money. |
10 points
QUESTION 6
- Which of the following is true?
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a. |
A long call is the same as a short put. |
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b. |
A short call is the same as a long put. |
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c. |
A call on a stock plus a stock is the same as a put. |
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d. |
None of the above |
10 points
QUESTION 7
- Which of the following is an example of an option class?
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a. |
All calls on a certain stock |
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b. |
All calls with a particular strike price on a certain stock |
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c. |
All calls with a particular time to maturity on a certain stock |
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d. |
All calls with a particular time to maturity and strike price on a certain stock |
10 points
QUESTION 8
- An investor has exchange-traded put options to sell 100 shares for $20. There is 25% stock dividend. Which of the following is the position of the investor after the stock dividend?
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a. |
Put options to sell 100 shares for $20 |
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b. |
Put options to sell 75 shares for $25 |
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c. |
Put options to sell 125 shares for $15 |
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d. |
Put options to sell 125 shares for $16 |
10 points
QUESTION 9
- Margin accounts have the effect of
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a. |
Reducing the risk of one party regretting the deal and backing out |
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b. |
Ensuring funds are available to pay traders when they make a profit |
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c. |
Reducing systemic risk due to collapse of futures markets |
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d. |
All of the above |
10 points
QUESTION 10
- With bilateral clearing, the number of agreements between four dealers, who trade with each other, is
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a. |
12 |
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b. |
1 |
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c. |
6 |
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d. |
2 |
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