EBF 301 EBF301 Final Exam Answers (Penn State University)

EBF 301 EBF301 Final Exam Answers (Penn State University)

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EBF 301 EBF301 Final Exam With Answers (Penn State University)

What type of chart is this? (Refer to EBF 301 Chart for this question.) 

What else is it called? 

What does the brown line represent? 

What does the orange line represent? 

What is the green line in the 2nd box called? 

What is the name given to the area formed by the two red trendlines? 

“mark-to-market” represents: (Refer to EBF 301 Chart for this question.) 

The point at which the upper red line crosses the right axis is called Resistance. 

The point at which the lower red line crosses the right axis is called the “floor”. (Refer to EBF 301 Chart for this question.) 

10. According to the RSI, this market is: (Refer to EBF 301 Chart for this question.) 

The comparison of a financial book’s “open” positions vs. the market’s daily settlement prices is called: 

The volumetric position of a financial book is a total of actual underlying contracts and: 

Penn State is worried about rising prices this winter. How could they protect their gas price? 

If an Option’s “Asset” price is $3.55 and the “strike” price is $3.25, how much of the premium cost is its “intrinsic” value? 

15. What is the remaining amount called? 

In a “_______ “agreement, payments are exchanged between two parties. Normally, one party receives a fixed price while the other receives a “floating” price. 

“Spread” trading involves taking a ______ position in one contract and a __________ position in another, related contract. 

Give an example of an “intermarket” spread. 

In an Options transaction, the Buyer takes on the risk. 

The holder of a “call” option is said to have a ___________ futures position. 

___________ use futures contracts to lay-off risk while _____________ use them for pure profit. 

A hedge consists of two similar positions. 

A Refiner would hedge what two commodities? 

In a “_________” hedge, gains or losses on one side are offset exactly by gains or losses on the other side. 

In order for a hedge to be truly effective, ______________ between the financial contract and the cash market has to occur. 

In natural gas, the relationship between the NYMEX Henry Hub price and any other cash market pricing point is called: 

Any action taken to reduce risk in energy commodities is referred to as: 

The action taken in #27 above will only reduce one’s price risk. 

One of the most important functions of futures markets is to provide the public with 

Futures contracts involve a contractual obligation by both parties to either ____________ or _______________ the underlying commodity. 

The physical commodity market is known as the ___________ market. 

_____________ contracts are an “over-the-counter” substitute for NYMEX futures. 

The Buyer of futures contracts is said to have a “short” position. 

The Seller of futures contracts is said to have a “short” position. 

35. The price of a futures contract is mostly related to the price of the options value. 

The term that describes the fact that cash and futures prices tend to come together at the expiration of the futures contract is contango. 

In actuality greater than 2% of all futures contracts go to delivery. 

The Seller of a Call Option expects prices to rise. 

For every Buyer of futures, there is a Seller. This results in futures trading being a “total-sum game”. 

Funds deposited with a clearing firm as a form of credit for trading futures through that firm are known as escrow. 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet). 

Calculate the 12-month “strip” for natural gas (rounded to 2 decimal points). Please input your answer in the format 0.00 without adding additional symbols such as $. 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet).

What is the “carrying charge” for April to December crude oil? (rounded to 2 decimal points). Please input your answer in the format 0.00 without adding additional symbols such as $. 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet).

Natural gas storage hedge:

What month of injection and what month of withdrawal give you the “widest” spread for storage play? Please format your answer as Month YYYY to Month YYYY (ex. January 2000 to January 2001), or Month YYYY - Month YYYY (ex. January 2000 - January 2001). 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet).

Natural gas storage hedge: 

What is that spread? (round to 3 decimal pts). Please input your answer in the format 0.000 without adding additional symbols such as $. 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet).

If the natural gas “Basis” for New York City for January, 2013 is $0.35, what is the actual price? (rounded to 2 decimal points). Please input your answer in the format 0.00 without adding additional symbols such as $. 

For the following calculations, use the pricing on the spreadsheet provided (refer to the EBF 301 Final Prices spreadsheet).

What is the price for crude oil at Cushing, OK for June, 2013? (rounded to 2 decimal points). Please input your answer in the format 0.00 without adding additional symbols such as $. 


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