of Futures and Forward Markets 1. Which of the following is true (circle one) a) Both forward and futures contracts are traded on exchanges. b) Forward contracts are traded on exchanges‚ but futures contracts are not. c) Futures contracts are traded on exchanges‚ but forward contracts are not. d) Neither futures contracts nor forward contracts are traded on exchanges. 2. Which of the following is not true (circle one) a) Futures contracts
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Intel shares. As indicated in the table below‚ the share price is $19.56 and January put option with a strike price of $17.50 costs $0.475. The investor is comparing two alternatives to limit downside risk. The first is to buy 1 January put option contract with a strike price of $17.50. The second involves instructing a broker to sell the 100 shares as soon as Intel’s price reaches $17.50. Discuss the advantages and disadvantages of the two strategies. Strike Price 15.00 17.50 20.00 22.50
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owner d. The development of a common currency in Europe. 3. A hedger in the futures market hedges to prevent a loss in a business transaction‚ but also gives up: a. A sizable fee to the exchange b. The loss on the futures contract c. The opportunity to gain from a favorable turn in prices of the item d. The potential gain on the futures contract. 4. All the following are risks associated with futures contracts except: not good question a. Margin risk b. Basis risk c. Price risk d. Manipulation
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What is the difference between a long forward position and a short forward position? Ans: When the enters into a long forward contract‚ he/she is agreeing to buy the underlying asset for a certain price at a certain time in future. When the enters into a short forward contract‚ he/she is agreeing to sell the underlying asset for a certain price at a certain time in future. 2. Explain carefully the difference between hedging‚ speculation‚ and arbitrage. Ans: A trader hedges when he/she has an
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A PROJECT REPORT ON AN ANALYTICL STUDY OF DERIVATIVES IN FUTURES WITH REFERENCE TO UNICON SECURITIES Submitted in partial fulfillment for the award of the Master of Business Administration [pic] I‚ under signed here by declare that the project report entitled “AN ANALYTICAL STUDY OF DERIVATIVES IN FUTURES WITH REFERENCE TO UNICON SECURITIES”‚ and this project is submitted to XXXXXX‚ affiliated to XXXX‚ is drafted by me and is original work of my own.
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Rainfall Future Contracts Throughout the year‚ there are different seasons that could have several impacts on many industries. To be precise‚ the elements of weather can actually impact a company and how well they do during the different seasons of the year. Rainfall is a part of our life in some areas‚ almost daily‚ and others randomly‚ affecting every business in some sort of way. Although we can’t predict or control the weather‚ there is a way companies can hedge any losses that weather could
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PART I. MULTIPLE CHOICE QUESTIONS 1. When the value of the British pound changes from $1.50 to $1.25‚ then the pound has _________ and the dollar has _________. a. appreciated; appreciated b. depreciated; appreciated c. appreciated; depreciated d. depreciated; depreciated 2. When the exchange rate changes from 1.0 euros to the dollar to 0.8 euros to the dollar‚ then the euro has _________ and the dollar has _________. a. appreciated; appreciated
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COMMODITY MARKET [pic] INDEX |Chapter No |Topic |Page No. | |1 |Introduction to Commodity Market |04 | |2 |History of Evolution of Commodity Markets |08 | |3
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Futures contract In finance‚ a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today (the futures price or the strike price) but with delivery occurring at a specified future date‚ the delivery date. The contracts are traded on a futures exchange. The party agreeing to buy the underlying asset in the future‚ the "buyer" of the contract‚ is said to be "long"‚ and the party agreeing to sell the asset
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Oman Crude Oil Futures Contract 1. Exchange: Dubai Mercantile Exchange 2. Trading Unit: 1‚000 U.S. barrels (42‚000 gallons) 3. Contract Value: The contract value shall be the Final Settlement Price multiplied by one thousand (1‚000) multiplied by the number of Contracts to be delivered 4. Price Quotation: U.S. dollars and cents per barrel 5. Trading Symbol: OQD 6. Trading Hours : Electronic trading is open from 16:00 CST/CDT Sundays and from 17:00 CST/CDT Monday to Thursday and closes at 16:15
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