Future's priceing and uses of options

Pricing off a futures contract depends on the Characteristics of

• Underlying asset

• Future asset

• Underlying price

• Future Price

Two popular models of futures pricing'cash and carry model

• Cash model

• Carry model

• Expectancy model

• Cash and carry model

Cash and carry model is also known as _____

• Non-arbitrage model

• Arbitrage model

• Both A and B

• None of the above

Formula of fair price ___

• Spot price +cost of carry- inflows

• Cost of carry + spot price - inflows

• Inflows - cost of carry + spot price

• None of the above

Margins are not considered while delivering the fair value or ____

• Synthetic value

• Future value

• Fair value

• Synthetic futures value

Expectancy model is not the relationship between____

• Spot price

• Future price

• Synthetic future

• Spot and futures prices

Futures can trade at a ____ to the spot price of underlying asset

• Premium

• Discount

• Spot price

• Permium Or discount

This expectedly Rising market is called

• Contango market

• Backwardation market

• Bull market

• Bear market

This expectedly falling market is called

• Backwardation market

• Cantango market

• Bull market

• Bear market

An important decision that a trader needs to make is which option he should trade: in -the- money, at-the -money or ________

• Out-of- the-money

• On-of-the-money

• All of these

• None of the above