SERIES 3 EXAM WITH 100% CORRECT ANSWERS

SERIES 3 EXAM WITH 100% CORRECT ANSWERS Actuals - correct answerThe physical, or cash, commodity. The goods underlying a futures contract. Arbitrage - correct answerThe purchase of a commodity against the simultaneous sale of a commodity to profit from unequal prices. The two transactions may take place on different exchanges, between two different commodities, in different delivery months, or between the cash and future markets. Basis - correct answerThe difference between cash price and the futures price of a commodity. CASH-FUTURES=BASIS. Basis is also used to refer to the difference between prices at different markets or between different commodity grades. Bear Spread - correct answerSale of near-month futures contracts against the purchase of deferred month futures contracts. Expect price to decline more in near month relative to the distant month. EX: Sell December contract and buy the more distant March Contract. Beta - correct answerA measure correlating stock price movement to the movement of an index. Beta is used to determine the number of contract