EBF 301 EBF301 Lesson 7 Quiz 1 Answers (Penn State University)

EBF 301 EBF301 Lesson 7 Quiz 1 Answers (Penn State University)

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EBF 301 EBF301 Lesson 7 Quiz 1 With Answers (Penn State University)

Circle the correct response.

 

1) The delivery point for the NYMEX WTI crude oil contract is: 

a. New York Harbor

b. Cushing, OK

c. Henry, LA

d. Los Angeles Harbor

 

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

a. Speculation

b. Trading

c. Hedging

d. Physicals

 

3) The answer to #2 above is an action in commodity futures markets taken to specifically to reduce:

a. Supply risk

b. Credit exposure

c. Price risk

d. a. & c. above

 

4) Risk reduction is accomplished by taking a position in both the futures and

a. Financial markets

b. Currency markets

c. Stock market

d. Cash market

 

5) One of the most important functions of futures markets is to provide the public with information about:

a. Oil supplies

b. US Dollar

c. Energy prices

d. Weather

 

6) The answer above is known as:

a. “open interest”

b. “price discovery”

c. “Final Settlement”

d. “Volatility”

 

 

 

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

a. Produce or consume

b. Make or take

c. Truck or rail

d. Process or refine

 

8) The physical commodity market is known as the ___________ market.

a. Financial

b. Futures

c. Cash

d. Forwards

 

9) Participants in futures markets are generally two (2) types: __________________ & ____________________________.

a. Locals and Spreaders

b. Speculators and Brokers

c. Hedge funds and Equity Funds

d. Commercial and Non-commercial.

 

10) _____________ contracts are not standardized and usually involve the cash market.

a. Forwards

b. Options

c. Spreads

d. Basis Swaps


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