Back To School Exam #3

9 Questions | Total Attempts: 314

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Back To School Quizzes & Trivia

Welcome to the third exam in the "Back to School with Ed Usset" series! There are 9 questions to be answered and the answers and explanations will be given to you at the very end. You have exactly one hour to complete this exam. You may not use any other material besides your memory to answer these questions! No internet, no books, just what you learned from what Ed Usset taught you in his previous lectures and quizes. This exam will be avaliable for one week before it is archived. At that time, a new set of lectures and quizes will be available from Ed Usset!Good luck! :)


Questions and Answers
  • 1. 
    When a call option is exercised, the buyer of the call...
    • A. 

      Is long the underlying futures contract

    • B. 

      Is short the underlying futures contract

    • C. 

      Pays the premium

    • D. 

      Is long a put

  • 2. 
    What is the purpose of “open outcry” in futures trading?
    • A. 

      To look good for the nightly business report

    • B. 

      To offer all traders an equal chance to respond to bids and offer

    • C. 

      To confuse onlookers and obscure the pricing process

  • 3. 
    Regulation and oversight of the futures industry occurs at three different levels; the CFTC (Commodity Futures Trading Commission), NFA (National Futures Association), and the futures exchanges. Which of these organizations is responsible for designing and offering new contracts?
    • A. 

      CFTC

    • B. 

      NFA

    • C. 

      The individual futures exchanges

  • 4. 
    The United States exports about 40% of soybeans produced. Which country or trading bloc is the largest buyer of U.S. soybeans?
    • A. 

      China

    • B. 

      European Union

    • C. 

      Mexico

    • D. 

      Japan

  • 5. 
    What do you call an options trading strategy involving the simultaneous purchase of out-of-the-money puts and calls in the same commodity?
    • A. 

      Short straddle 

    • B. 

      Bull spread 

    • C. 

      Long strangle

    • D. 

      Call ratio backspread

  • 6. 
    What is the lowest closing price level attained by a November soybean futures contract since 1980?
    • A. 

      $4.63¼

    • B. 

      $4.38

    • C. 

      $4.05¼

    • D. 

      $3.95 

  • 7. 
    To simultaneously buy corn futures and sell soybean futures is an example of a (an)...
    • A. 

      Intercommodity spread

    • B. 

      Bear spread

    • C. 

      Interdelivery or intramarket spread

    • D. 

      Cross-hedge

  • 8. 
    What do you call a futures trading strategy involving the simultaneous sale of a nearby futures contract and purchase of a deferred contract in the same commodity?
    • A. 

      Short straddle 

    • B. 

      Bear spread 

    • C. 

      Bull spread 

    • D. 

      Intercommodity spread

  • 9. 
    What is the highest closing price level ever attained by a December (i.e., new crop) corn futures contract?
    • A. 

      $6.89

    • B. 

      $7.32

    • C. 

      $7.68

    • D. 

      $7.96

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