Multiple choice type queries for Monetary Instruments and Markets As requested, below are questions coming from my " data base" of multiple choice type questions. I do not be ready to be able to put the answers online before the final exam. I do not need a " data base" of the answers to these concerns. Some of these questions are on material that was on the first exam and other questions take material that I covered a year ago but did not cover this season (such while margin, offering stock short). But since some college students requested this " info base", it is here, if you locate it valuable.
1 . Multiple Choice (____ points; every single multiple choice question is worth ___ points)
Circle the best answer. In the event you change your response, indicate the brand new choice to the left of the question and circle it. 1 . Federal Cash are typically:
a. Loan coming from a supplier that is collateralized by Treasury securities. b. Federal Book assets
c. Loans in the Federal Hold to banking companies
d. Loans from financial institutions to their " best” commercial customers electronic. Overnight financial loans settled in immediately offered funds
2 . Eurodollars best associated with:
a. The use of dollars currency ($100 bills) in less produced countries in Europe b. The loans of Europeans by domestic US banking companies
c. The transfer of ownership of the domestic US bank pay in from a US company to a international based owner d. The introduction of a common currency in European countries.
3. A hedger inside the futures industry hedges to stop a loss in a business transaction, but also breaks in: a. A sizable fee to the exchange
w. The loss for the futures contract
c. The chance to gain from a favorable turn in prices in the item m. The potential gain on the futures and options contract.
4. All the subsequent are risks associated with futures and options contracts other than: not good question a. Perimeter risk
b. Basis risk
c. Selling price risk
g. Manipulation risk
5. What action might the holder of a maturation (expiring) call up option take with an option which will cost 300 dollar, had a reach price of $50 and the price of the shares was $52, in the event the option runs out today: a. Let the option expire unexercised
b. Physical exercise the option
c. Request that the $300 always be returned
g. Buy more call options with a hit of $53.
6. An S& T with a excessive negative DISTANCE position for the next 180 times would almost certainly take which in turn action to hedge its interest rate risk: a. Purchase futures legal agreements
b. Promote futures deals
c. Sell off put choices on options contracts contracts
deb. Buy set options upon futures deals
e. Equally b and d previously mentioned
7. The significance of any alternative varies immediately with:
a. The price variance of the root commodity
w. The time to expiration
c. The degree of interest rates
g. The predicted dividend payments on the actual stock
at the. Both a and w above
almost eight. A player growing wheat is ______ wheat and may hedge value risk by simply _______ wheat futures: a. Short; long
b. Buying; selling
c. Selling; obtaining
d. Lengthy; selling.
being unfaithful. First Countrywide Bank lately purchased a T-bill options contracts contract to hedge a risk situation at the bank. If the price of the futures contract is usually increasing, a. First Nationwide is " gaining”
n. First Countrywide is " losing” on futures.
c. First Countrywide is none " gaining nor losing”
d. Not one of the above.
twelve. Daily changes in futures prices means that a single party (hedger or speculator) has gained; another suffered losses on the agreement. How are the exchanges capable of keep the " daily” loss in the contract and prevent arrears: a. Menace of individual bankruptcy
b. Daily margin telephone calls if necessary
d. Guarantees by third parties
11. A five-member national regulatory commission payment, which serves as the primary limiter of the futures market is the: a. Chicago Mercantile Exchange
b. National Commodity Options contracts Commission
c. Commodity Futures and options Trading Commission payment
d. Chi town Board of Trade
doze. A financial institution that shrubs its future financing costs inside the T-bill futures market is: a. Hedging correctly
b. Accepting some basis risk...