7. KHANH HOA _ CHUONG 13

A(n) _________is a standardized agreement to deliver or receive a specified amount of a specified financial instrument at a specified price and date.

• option contract

• brokerage contract

• financial futures contract

• margin call

Interest rate futures are not available on

A) Treasury bonds.

B) Treasury notes.

C) Eurodollar CDs.

D) the S&P 500 index.

• A

• B

• C

• D

______________take positions in futures to reduce their exposure to future movements in interest rates or stock prices.

A) Hedgers

B) Day traders

C) Position traders

D) none of the above

• Hedgers

• Day traders

• Position traders

• none of the above

__________ trade futures contracts for their own account.

• Commission brokers

• Floor brokers

• Commission traders

• Floor traders

The initial margin of a futures contract is typically percent of a between __________ futures contract’s full value.

• 0 and 2

• 5 and 18

• 25 and 40

• 45 and 60

Futures exchanges facilitate the trading process and take buy or sell positions on futures contracts.

• true

• false

If the prices of Treasury bonds ________, the value of an existing Treasury bond futures contract should _______

• A. increase; be unaffected

• B. decrease; be unaffected

• C. A and B

• D) decrease; decrease

• E) decrease; increase

Assume that a T-bill futures contract with a face value of $1 million is purchased at a price of $95.00 per $100 face value. At settlement, the price of T-bills is $95.50. What is the difference between the selling and purchase price of the futures contract?

• $.50

• $50

• $500

• $5,000

• none of the above

If speculators believe interest rates will ____________ a T-bill futures, they would consider_____contract today.

• increase; selling

• increase; buying

• decrease, selling

• decrease; purchasing a call option on

Financial futures contracts on U.S. securities are _______ by non-U.S. financial institutions.

A) not allowed to be traded

B) are rarely desired

C) are commonly traded

D) A and B

• A

• B

• C

• D