Homework Answers
please find below the solution.. let me know if you need any clarification..
correct answer is option : C) Buying a stock
Stock holder will have the ownership right. they have the right to vote, right to receive dividend etc.
Future contract are derivative instrument and does not carries ownership right. Therefore correct answer is option C)
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e following trades implies that ownership has been taken? 1. Which of the following trades im...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures contract. b. Selling a futures contract. c. Buying a stock. d. Shorting a stock. e. None of the above implies ownership. The following transactions are the only ones made during the first 4 days a futures contract trades. Answer question 2 based on this table. DAY TRANSACTION S O 1 A Long 30, B Short 30 2 A Long 55, C Short 55 3...
1. What is a stock? A. An IOU of a corporation. B. A piece of ownership...
1. What is a stock? A. An IOU of a corporation. B. A piece of ownership in a corporation. C. Total ownership of a corporation. D. A retirement investment. E. None of the above. 2. When you purchase a stock for $10.00 and then sell it one month later at $20.00 you are · A. Buying low and selling high · · B. Buying high and selling low · · C. Short selling low and short covering high · ·...
Answer questions S and 6 based on the following information. A, B, and C are three non-cyclical commodities traded...
Answer questions S and 6 based on the following information. A, B, and C are three non-cyclical commodities traded on a futures exchange. On April 1, the settlement prices of their June and December 500 526 200 100 JUNE 212 106 DECEMBER Given the above price information, which of these commodities could possibly have a positive convenience value? a. Only A. b. Only B c. Only C d. A, B, and C. e. None of them. 5. 6. If the...
2. Suppose the maintenance margin is $5 and initial margin is $10. A long trader trades...
2. Suppose the maintenance margin is $5 and initial margin is $10. A long trader trades 10 contract in the market. when the Day 2's ending balance is $40/ what should the trader do? a. Do nothing but keep trading in Day 3 b. Deposit extra $10 c. Deposit extra $60 d. deposit extra $100 e. None above 3. Which of the following statement regarding clearing hours in futures market is wrong? a. Clearing house collects margin b. Clearing house...
Answer question 4 based upon the following information: An American trader has to make a foreign...
Answer question 4 based upon the following information: An American trader has to make a foreign currency payment in six months on imported goods that have already been received. The most appropriate hedge against currency risk is provided by Q4. a. Selling foreign currency futures contracts. b. Buying foreign currency futures contracts. c. Buying call options on foreign currency d. Buying put options on foreign currency. Answer question 5 based upon the following information: An American company has bid on...
QUESTION 117 Which of the following regarding futures contracts is least accurate? a. Futures contracts are...
QUESTION 117 Which of the following regarding futures contracts is least accurate? a. Futures contracts are less liquid than forward contracts. b. Futures contracts are marked-to-market. c. Futures contracts are traded on a regulated exchange. d. Futures contracts allow more delivery options than forward contracts. QUESTION 118 A long position in a futures contract expiring in November can be offset by: a. Selling a future contract expiring in November. b. Selling a future contract expiring anytime between September and December....
roughly the amount of hich he or she is 13. Which of the following four positions...
roughly the amount of hich he or she is 13. Which of the following four positions will be profitable if the price of XYZ stock rises? 1. Buying a put on XYZ stock II. Buying XYZ stock III. Writing (or selling) a call on XYZ stock IV. Buying a call on XYZ stock A) II and III only B) II and IV only C) I and IV only D) I, II, and Ill only 14. Suppose that the Japanese yen...
Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the firm...
Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records. The audit has been unable to obtain the firm's financial statements that were prepared by Sam. While there is no evidence of wrongdoing, the auditors are not able to complete the audit. Which of the following characteristics of useful information is absent in the situation described above? Choose only...
1.Which of the following is not the reason for Basic risk of hedging using futures? a....
1.Which of the following is not the reason for Basic risk of hedging using futures? a. The asset whose price is to be hedge may not be exactly the same as the underlying asset of the futures contract b. The asset whose price is to be hedge may not be exactly the same as the price of the futures contract c. The hedger may not be certain of the exact date the asset will be bought or sold d. The...
YOX- -12) - N-12- * S. The table Table for N(x) When x 50 w --.12)...
YOX- -12) - N-12- * S. The table Table for N(x) When x 50 w --.12) -NE-191 ith - Answer questions 5 and 6 based on the following informatio mation. eeeeee A, B, and are three non-cyclical commodities traded on a fi exchange. On April 1, the settlement prices of their June and futures contracts are given as: I AL B JUNE 100 200 106 on a futures ne and December DECEMBER 196 5. Given the above price information, which...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures contract. b. Selling a futures contract. c. Buying a stock. d. Shorting a stock. e. None of the above implies ownership. The following transactions are the only ones made during the first 4 days a futures contract trades. Answer question 2 based on this table. DAY TRANSACTION S O 1 A Long 30, B Short 30 2 A Long 55, C Short 55 3...
Answer questions S and 6 based on the following information. A, B, and C are three non-cyclical commodities traded on a futures exchange. On April 1, the settlement prices of their June and December 500 526 200 100 JUNE 212 106 DECEMBER Given the above price information, which of these commodities could possibly have a positive convenience value? a. Only A. b. Only B c. Only C d. A, B, and C. e. None of them. 5. 6. If the...
Answer question 4 based upon the following information: An American trader has to make a foreign currency payment in six months on imported goods that have already been received. The most appropriate hedge against currency risk is provided by Q4. a. Selling foreign currency futures contracts. b. Buying foreign currency futures contracts. c. Buying call options on foreign currency d. Buying put options on foreign currency. Answer question 5 based upon the following information: An American company has bid on...
roughly the amount of hich he or she is 13. Which of the following four positions will be profitable if the price of XYZ stock rises? 1. Buying a put on XYZ stock II. Buying XYZ stock III. Writing (or selling) a call on XYZ stock IV. Buying a call on XYZ stock A) II and III only B) II and IV only C) I and IV only D) I, II, and Ill only 14. Suppose that the Japanese yen...
YOX- -12) - N-12- * S. The table Table for N(x) When x 50 w --.12) -NE-191 ith - Answer questions 5 and 6 based on the following informatio mation. eeeeee A, B, and are three non-cyclical commodities traded on a fi exchange. On April 1, the settlement prices of their June and futures contracts are given as: I AL B JUNE 100 200 106 on a futures ne and December DECEMBER 196 5. Given the above price information, which...
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