AAEC 4317 Exam 1 QUESTIONS WITH ANSWERS LATEST UPDATED 10
VERIFIED SOLUTIONS ( ALREADY GRADED A+)
Study online at https://quizlet.com/_gblkn3
1. forward contracts a private negotiation made in the
present that establishes the price of
a commodity to be delivered in the
future
2. forward price 2 parties agree to exchange a good
or service in the future at a price
specified now
3. Cash/Spot price The price for the immediate delivery
of the item.
No money is paid in the present
4. Face value the quantity of the item times the for-
ward price specified in the contract
5. Long position the party who agrees to buy the
specified good or service
6. Short position the party who agrees to sell the
good or service q
7. 2 problem with forward contracts -Unable to eliminate the risk of de-
fault among the parties in the con-
tract......Solution: A neutral third par-
ty, the exchange (e.g., CBOT)
-specified to a particular seller
and buyer-not standardized or inter-
changeable.....Solution: standard-
ization and interchangeability
8. Future Contracts standardized forward contracts that
are traded on some organized ex-
change
9. legally binding agreement A futures contract is a ________
standardized commodity ___________ ____________ be-
tween a seller and buyer, that calls
, AAEC 4317 Exam 1 QUESTIONS WITH ANSWERS LATEST UPDATED 10
VERIFIED SOLUTIONS ( ALREADY GRADED A+)
Study online at https://quizlet.com/_gblkn3
set price for the seller to deliver to the buyer
organized exchange a ______________ ____________
(with specified quantity and quality)
at a ____ ______ on a future date
at an _________ ___________.
10. regulated by an organized exchanged CME
(3) CBOT
NYMEX
11. Interchangeability contracts may change hands many
times before their specified delivery
dates
- Unit price of a futures contract may
change on each transaction
12. Performance Bond Both buyer and seller post
a _____________ ______(funds)
with the exchange
13. Last trading day all open postions must be closed out
by this point
14. Clearing Option plays the role of third party to every
futures transaction after the trade
has "cleared"
15. 1. CME commodity products 6 types of CME futures contracts
2. CME foriegn exchange products
3. CME interest rate products
4. CME equity products
5. CME alternative investment prod-
ucts
6. TRakrs
16. Speculators Buy and sell futures contracts with
the expectation of profiting from
changes in the price of underlying
VERIFIED SOLUTIONS ( ALREADY GRADED A+)
Study online at https://quizlet.com/_gblkn3
1. forward contracts a private negotiation made in the
present that establishes the price of
a commodity to be delivered in the
future
2. forward price 2 parties agree to exchange a good
or service in the future at a price
specified now
3. Cash/Spot price The price for the immediate delivery
of the item.
No money is paid in the present
4. Face value the quantity of the item times the for-
ward price specified in the contract
5. Long position the party who agrees to buy the
specified good or service
6. Short position the party who agrees to sell the
good or service q
7. 2 problem with forward contracts -Unable to eliminate the risk of de-
fault among the parties in the con-
tract......Solution: A neutral third par-
ty, the exchange (e.g., CBOT)
-specified to a particular seller
and buyer-not standardized or inter-
changeable.....Solution: standard-
ization and interchangeability
8. Future Contracts standardized forward contracts that
are traded on some organized ex-
change
9. legally binding agreement A futures contract is a ________
standardized commodity ___________ ____________ be-
tween a seller and buyer, that calls
, AAEC 4317 Exam 1 QUESTIONS WITH ANSWERS LATEST UPDATED 10
VERIFIED SOLUTIONS ( ALREADY GRADED A+)
Study online at https://quizlet.com/_gblkn3
set price for the seller to deliver to the buyer
organized exchange a ______________ ____________
(with specified quantity and quality)
at a ____ ______ on a future date
at an _________ ___________.
10. regulated by an organized exchanged CME
(3) CBOT
NYMEX
11. Interchangeability contracts may change hands many
times before their specified delivery
dates
- Unit price of a futures contract may
change on each transaction
12. Performance Bond Both buyer and seller post
a _____________ ______(funds)
with the exchange
13. Last trading day all open postions must be closed out
by this point
14. Clearing Option plays the role of third party to every
futures transaction after the trade
has "cleared"
15. 1. CME commodity products 6 types of CME futures contracts
2. CME foriegn exchange products
3. CME interest rate products
4. CME equity products
5. CME alternative investment prod-
ucts
6. TRakrs
16. Speculators Buy and sell futures contracts with
the expectation of profiting from
changes in the price of underlying
