Hull:Options,Futures,andOtherDerivatives,NinthEditionChapter2:MechanicsofFuturesMarketsMultipleChoiceTestBank:Questions1.WhichofthefollowingistrueA.Bothforwardandfuturescontractsaretradedonexchanges.B.Forwardcontractsaretradedonexchanges,butfuturescontractsarenot.C.Futurescontractsaretradedonexchanges,butforwardcontractsarenot.D.Neitherfuturescontractsnorforwardcontractsaretradedonexchanges.2.WhichofthefollowingisNOTtrueA.FuturescontractsnearlyalwayslastlongerthanforwardcontractsB.Futurescontractsarestandardized;forwardcontractsarenot.C.Deliveryorfinalcashsettlementusuallytakesplacewithforwardcontracts;thesameisnottrueoffuturescontracts.D.Forwardcontractsusuallyhaveonespecifieddeliverydate;futurescontractoftenhavearangeofdeliverydates.3.Inthecornfuturescontractanumberofdifferenttypesofcorncanbedelivered(withpriceadjustmentsspecifiedbytheexchange)andthereareanumberofdifferentdeliverylocations.WhichofthefollowingistrueA.Thisflexibilitytendsincreasethefuturesprice.B.Thisflexibilitytendsdecreasethefuturesprice.C.Thisflexibilitymayincreaseandmaydecreasethefuturesprice.D.Thisflexibilityhasnoeffectonthefuturesprice4.Acompanyentersintoashortfuturescontracttosell50,000unitsofacommodityfor70centsperunit.Theinitialmarginis$4,000andthemaintenancemarginis$3,000.Whatisthefuturespriceperunitabovewhichtherewillbeamargincall?A.78centsB.76centsC.74centsD.72cents5.Acompanyentersintoalongfuturescontracttobuy1,000unitsofacommodityfor$60perunit.Theinitialmarginis$6,000andthemaintenancemarginis$4,000.Whatfuturespricewillallow$2,000tobewithdrawnfromthemarginaccount?A.$58B.$62C.$64D.$666.Onefuturescontractistradedwhereboththelongandshortpartiesareclosingoutexistingpositions.Whatistheresultantchangeintheopeninterest?A.NochangeB.DecreasebyoneC.DecreasebytwoD.Increasebyone7.WhoinitiatesdeliveryinacornfuturescontractA.ThepartywiththelongpositionB.ThepartywiththeshortpositionC.EitherpartyD.Theexchange8.YouselloneDecemberfuturescontractswhenthefuturespriceis$1,010perunit.Eachcontractison100uni...
