the economics of money, banking, and financial markets

403 $

© 2014 Pearson Canada Inc.$

17. 
    

    By selling short a futures contract of $100,000 at a price of 96, you are agreeing to deliver
    ____.
    A) $100,000 face value securities for $104,167
    B) $96,000 face value securities for $100,000
    C) $100,000 face value securities for $96,000
    D) 100,000 face value securities for $100,000
    Answer: C
    Diff: 1 Type: MC Page Ref: 326
    Skill: Applied
    Objective List: 14.1 Distinguish among forwards, futures, options, and swaps

    
    


18. 
    

    By buying a long $100,000 futures contract for 115, you agree to pay ____.
    A) $100,000 for $115,000 face value bonds
    B) $115,000 for $100,000 face value bonds
    C) $86,956 for $100,000 face value bonds
    D) $86,956 for $115,000 face value bonds
    Answer: B
    Diff: 1 Type: MC Page Ref: 326
    Skill: Applied
    Objective List: 14.1 Distinguish among forwards, futures, options, and swaps

    
    


19. 
    

    If you sold a short contract on financial futures, you hope interest rates ____.
    A) rise
    B) fall
    C) are stable
    D) fluctuate
    Answer: A
    Diff: 1 Type: MC Page Ref: 327
    Skill: Applied
    Objective List: 14.1 Distinguish among forwards, futures, options, and swaps

    
    


20. 
    

    If you bought a long contract on financial futures, you hope that interest rates ____.
    A) rise
    B) fall
    C) are stable
    D) fluctuate
    Answer: B
    Diff: 1 Type: MC Page Ref: 327
    Skill: Applied
    Objective List: 14.1 Distinguish among forwards, futures, options, and swaps