Futures Final Exam UPDATED ACTUAL
Questions and CORRECT Answers
Although this is not accumulative. Briefly look over Exam 1 and 2 to answer big picture
questions - CORRECT ANSWER✔✔-
Long - CORRECT ANSWER✔✔- To buy
Short - CORRECT ANSWER✔✔- to sell
Futures contracts ______ on one date and _______ on another - CORRECT ANSWER✔✔-
open
close
In the Futures market you are locked into your position and exposed to the market
movements until - CORRECT ANSWER✔✔- you offset
Why would we want to delay the decision to enter a futures contract - CORRECT
ANSWER✔✔- to allow us to collect more information before buying/selling
Look at examples of why we would want to delay the decision on Intro to Options slides 5-6 -
CORRECT ANSWER✔✔-
If something has ______, there needs to be a market for buyers and sellers to trade it -
CORRECT ANSWER✔✔- value
What market exists today because people value the ability to delay decisions - CORRECT
ANSWER✔✔- Options market
What does it mean to be a buyer in the options market - CORRECT ANSWER✔✔- you want
the ability (not the obligation) to enter a contract at a set price in future
, What does it mean to be a seller in the options market - CORRECT ANSWER✔✔- for a fee,
they are willing to take the opposite side of your trade at that set price in the future
An options buyer is called a - CORRECT ANSWER✔✔- purchaser
An options purchaser has the right (but not the obligation) to buy (or sell) a futures contract at
a specified price on or before a certain expiration date - CORRECT ANSWER✔✔-
An options purchaser has the ______ but not the _____ - CORRECT ANSWER✔✔- right
obligation
The whole reason the options market was named options is because - CORRECT
ANSWER✔✔- buyers have an option to utilize the product
Option contract holder are granted the opportunity to secure a _______ - CORRECT
ANSWER✔✔- futures contract
meaning to buy or sell the contract
Each option represents a specific futures contract called _____ - CORRECT ANSWER✔✔-
the underlying futures contract
specified price - CORRECT ANSWER✔✔- the price that the underlying futures contract can
be secured at
It is negotiable
Numerous option contracts can be for a single futures contract - CORRECT ANSWER✔✔-
The specific price is called - CORRECT ANSWER✔✔- strike price
Questions and CORRECT Answers
Although this is not accumulative. Briefly look over Exam 1 and 2 to answer big picture
questions - CORRECT ANSWER✔✔-
Long - CORRECT ANSWER✔✔- To buy
Short - CORRECT ANSWER✔✔- to sell
Futures contracts ______ on one date and _______ on another - CORRECT ANSWER✔✔-
open
close
In the Futures market you are locked into your position and exposed to the market
movements until - CORRECT ANSWER✔✔- you offset
Why would we want to delay the decision to enter a futures contract - CORRECT
ANSWER✔✔- to allow us to collect more information before buying/selling
Look at examples of why we would want to delay the decision on Intro to Options slides 5-6 -
CORRECT ANSWER✔✔-
If something has ______, there needs to be a market for buyers and sellers to trade it -
CORRECT ANSWER✔✔- value
What market exists today because people value the ability to delay decisions - CORRECT
ANSWER✔✔- Options market
What does it mean to be a buyer in the options market - CORRECT ANSWER✔✔- you want
the ability (not the obligation) to enter a contract at a set price in future
, What does it mean to be a seller in the options market - CORRECT ANSWER✔✔- for a fee,
they are willing to take the opposite side of your trade at that set price in the future
An options buyer is called a - CORRECT ANSWER✔✔- purchaser
An options purchaser has the right (but not the obligation) to buy (or sell) a futures contract at
a specified price on or before a certain expiration date - CORRECT ANSWER✔✔-
An options purchaser has the ______ but not the _____ - CORRECT ANSWER✔✔- right
obligation
The whole reason the options market was named options is because - CORRECT
ANSWER✔✔- buyers have an option to utilize the product
Option contract holder are granted the opportunity to secure a _______ - CORRECT
ANSWER✔✔- futures contract
meaning to buy or sell the contract
Each option represents a specific futures contract called _____ - CORRECT ANSWER✔✔-
the underlying futures contract
specified price - CORRECT ANSWER✔✔- the price that the underlying futures contract can
be secured at
It is negotiable
Numerous option contracts can be for a single futures contract - CORRECT ANSWER✔✔-
The specific price is called - CORRECT ANSWER✔✔- strike price
