OPTIONS FUTURES AND OTHER
DERIVATIVES 11TH EDITION JOHN C HULL
TEST BANK MCQS ONLY ALL CHAPTERS
100% ORIGINAL VERIFIED A+ FINAL
STUDY GUIDE 2026 SOLVED QUESTIONS
FULLY CORRECT
⫸ Difference Between a Forward and a Futures Contact Answer:
Forwards:
1.Can be customized to any commodity, amount and delivery date - not
standarized
2. Can occur on a cash or delivery basis
3. Do not trade on a centralized exchange; they are (OTC) instruments -
> higher degree of default risk so not as easily available as future
contracts
4. Only settled on settlement date
5. For hedging while futures are for speculating
⫸ Futures Contract Answer: A contractual agreement, generally made
on the trading floor of a futures exchange, to buy or sell a particular
commodity or financial instrument at a pre-determined price in the
future
⫸ Derivative Answer: A financial instrument whose value depends on
the values of other, more basic underlying values
, ⫸ Variables underlying derivatives Answer: Prices of traded assets
⫸ Spot Contract Answer: An agreement to buy or sell an asset today
⫸ Delivery Price Answer: Price in the forward contract
⫸ Forward Price Answer: Delivery Price that would apply if the
contract was entered at that time
⫸ Payoff from Forward Contracts Answer: S(t) is the spot price
K is the delivery price
Long: S(t)-K
Short: K-S(t)
⫸ CBOT & CME Answer: Chicago Board of Trade & Chicago
Mercantile Exchange
Largest exchanges on which future contracts are traded
⫸ Call Option Answer: Gives holder right to buy the underlying asset
by a certain date and a certain price
DERIVATIVES 11TH EDITION JOHN C HULL
TEST BANK MCQS ONLY ALL CHAPTERS
100% ORIGINAL VERIFIED A+ FINAL
STUDY GUIDE 2026 SOLVED QUESTIONS
FULLY CORRECT
⫸ Difference Between a Forward and a Futures Contact Answer:
Forwards:
1.Can be customized to any commodity, amount and delivery date - not
standarized
2. Can occur on a cash or delivery basis
3. Do not trade on a centralized exchange; they are (OTC) instruments -
> higher degree of default risk so not as easily available as future
contracts
4. Only settled on settlement date
5. For hedging while futures are for speculating
⫸ Futures Contract Answer: A contractual agreement, generally made
on the trading floor of a futures exchange, to buy or sell a particular
commodity or financial instrument at a pre-determined price in the
future
⫸ Derivative Answer: A financial instrument whose value depends on
the values of other, more basic underlying values
, ⫸ Variables underlying derivatives Answer: Prices of traded assets
⫸ Spot Contract Answer: An agreement to buy or sell an asset today
⫸ Delivery Price Answer: Price in the forward contract
⫸ Forward Price Answer: Delivery Price that would apply if the
contract was entered at that time
⫸ Payoff from Forward Contracts Answer: S(t) is the spot price
K is the delivery price
Long: S(t)-K
Short: K-S(t)
⫸ CBOT & CME Answer: Chicago Board of Trade & Chicago
Mercantile Exchange
Largest exchanges on which future contracts are traded
⫸ Call Option Answer: Gives holder right to buy the underlying asset
by a certain date and a certain price
