1 the basis for a futures contract isa current spot, Ask an Expert

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1. The basis for a futures contract is

a. current spot price/futures price. b. futures price X current spot price. c. current spot price - futures price. d. futures price/current spot price.

2. Which one of the following is an example of a long hedger?

a. an oil refinery buying crude at spot oil prices. b. a farmer who grows wheat and sells futures contracts short. c. a trader who transacts in futures for the sole purpose of making profits. d. a cereal producer who purchases wheat futures contracts.

3. What organized exchange mechanism reassures the futures buyer and seller that the obligations of the other party will be fulfilled?

a. the clearinghouse. b. the initial margin. c. marking to market. d. the maintenance margin.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92742865

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