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