EBF 301 EBF301 Quiz 7 With Answers (Penn State University)
EBF 301 EBF301 Quiz 7 Answers (Penn State University)
- The Buyer of futures contracts is said to have a “short” position.
- The Seller of futures contracts is said to have a “short” position.
- The price of a futures contract is mostly related to the price of the underlying physical commodity.
- The FERC is the governmental agency that regulates commodity futures trading.
- 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 only 2% of all futures contracts go to delivery.
- Someone taking a “short” futures position expects prices to remain flat.
- Conversely, someone who takes a “long” futures position 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 margin
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