Futures & Options Test 1

the sample mean is $150 and the standard deviation is $20. using the empirical rule, about 95% of the monthly food expenditures are between what 2 amounts

$110 and $190

the main purpose of a descriptive statistics is to

summarize data in a useful and informative manner

the traditional concept of futures hedging involves

taking a equal but opposite position in both cash and futures position

what type of variable is the number of gallons of gas pumped by a filling station during a day?

continuos

once you've bought a futures contract what happens next?

either you take delivery of the commodity or you offset your position by selling a futures contract for the same delivery period

what statistics are needed to draw a bow plot

minimum, maximum, median, first and third quartiles

the monthly salaries of a sample of 100 employees were rounded to the nearest ten dollars. they ranged form a low of $1040 to a high of $1720. if we want to condense the data into 7 classes, what is the most convenient class interval

$100

the a scatter diagram, we describe the relationship between

2 variables measured at the interval or ratio level

in a contingency table we describe the relationship between

2 variables measured at the ordinal level

a row of stem-and-leaf chart appears as follows: 3 | 0 1 3 5 7 9. summer that data is rounded to the nearest unit

Both A and C The frequency of the class is 7 the max value in the class is 39

after a corn farmer has hedged his cash position he is left with

basis risk

futures investments are said to provide leverage because

because the initial investment capital is far less than the face value of the investment itself

to "lock in" a profit margin, a cattle feedlot operator should

buy corn futures, buy feeder cattle futures and sell live cattle futures

how is a long hedge implemented?

buy futures at beginning of hedge period and then sell futures at end of hedge period when input is purchased in the cash market

for qualitative data, the relative frequency for a class computed as

class frequency divided by total frequency

Futures contracts for different delivery periods trade simultaneously at a futures exchange

false

a dot plot is an easy way to represent the relationship between to variables

false

a parameter is a measurable character of a sample

false

a relative frequency distribution shows the number of observations in each class

false

a store asked shoppers for their zip code to identify market areas. zip codes are an example of ratio data

false

a variable measured at the interval or ratio level can have more than one arithmetic mean

false

a very high stock-to-use number is typically associated with higher cash prices.

false

in a company, the standard deviation of ages of female employees is 6 years and the standard of deviation of the age male employees in ten years. these stats indicate that there is a more spread in the ages of the female employees

false

in a negatively skewed distribution, the mean is greater than the median

false

to buy futures contract is to promise to deliver a specific quantity and quality of a commodity, at a specific location and during a specific period of time in the future

false

ordinal level of measurement is considered the "lowest" level of measurement

false normal level

the Union of Electrical workers of America with 8,128 members polled 362 meters regarding a new wage package to be submitted to management. the population is the 362 members

false the sample is the 362 members

which measurement of central location is used to determine a average annual precent increase

geometric mean

the US government allows futures trading because

it provides the important economic benefits of price discovery and hedging

basis is defined

local cash price is less future price

a trader who is short 1 corn futures contract (5000bu per contract) at $6.40 offsets her position at $6.45. Assuming commission is %50, what is her gain or loss on the trade

loss of $300

a questionnaire contained a question regarding marital status. the respondent checked either single, married, divorced, separated, or widowed, what is the scale of measurement of the question?

nominal

when a class interval is expressed as: 100 up to 200,

observations with values of 200 are excluded for the class frequency

which word is NOT part of the definition of descriptive statistics?

predicting

the income of a group of 50 loan applicants are obtained. which level of measurement is income?

ratio

a class interval, which is the width of a class, can be determined by subtracting the lower limit of a class from the lower limit of the net higher class

true

a frequency distribution groups data into classes showing the number of observations in each class

true

a population is a collection of all individuals, objects, or measurement of interest

true

a relationship between gender and preference for coke and pepsi can be best represented by a contingency table

true

a stem and leaf diagram shows the actual data values

true

quartiles divide a distribution into 4 equal part with regard to number of observation

true

speculating in futures is said to be zero sum game because for every winning trade there must be a losing trade

true

the "box" in a box plot shoes the interquartile rage

true

the arithmetic is the sum of the observations divided by the total number of observations

true

the height of a bar in a histogram represents the number of observations for a class

true

the principle difference between the interval and ratio scale is that the ratio has a meaningful zero point

true

the system of margin accounting has helped ensure the financial integrity of the Chicago Mercantile Exchange

true

to contrust a histogram, the class frequencies are platted on the vertical axis and wither the stated limits, or the midpoints are plotted o the horizontal axis

true