Derivatives Exam 1 Part 1
The open interest on silver futures at a particular time is the number of
all outstanding silver futures contracts
The S&P 500 Index futures contract is an example of a _____ delivery contract. The pork bellies contract is an example of an _____ delivery contract
cash, actual
In the future market the short position's loss is ____ the long position's gain
equal to
Today's futures markets are dominated by trading in
financial contracts
Futures contracts have many advantages over forward contracts except that
futures contracts are tailored to the specific needs of the investor
A person with a long position in a commodity futures contract wants the price of the commodity to
increase substantially
If an asset price declines, the investor with a _______ is exposed to the largest potential loss
long futures contract
An investor who goes short in a futures contract will _____ any increase in value of the underlying asset and will ___ any decrease in value in the underlying asset
pay, receive
An investor who goes long in a future contract will ____ any increase in value of the underlying asset and will ____ any decrease in value in the underlying asset
receive, pay
________ are likely to close their positions before the expiration date, while _____ are likely to make or take delivery
speculators, hedgers