Back To School Quiz #4

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  • 1/7 Questions

    Let’s assume that you have been aggressively selling futures to price a crop, but you are still less than 100% sold. Today the market trades higher and you get a margin call; has your overall net worth increased or decreased?

    • Increased
    • Decreased
    • No change
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About This Quiz

Welcome to Quiz #4! Ed’s challenging and authentic quiz questions are designed to test your grain marketing knowledge, and will help you learn while having fun! Ed Usset is the author of “Grain Marketing is Simple, It’s Just Not Easy,” and is a grain marketing specialist at the University of Minnesota.

Back To School Quiz #4 - Quiz

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  • 2. 

    The rapid growth of grain production in South America has been a big story for several decades. Who produced more soybeans in 2009, the United States, Brazil or Argentina?

    • United States

    • Brazil

    • Argentina

    Correct Answer
    A. United States
    Explanation
    The correct answer is the United States. The question asks who produced more soybeans in 2009, and the United States is known for its significant production of soybeans. This is supported by the fact that the rapid growth of grain production in South America has been a big story for several decades, indicating that the United States has been a major player in this industry.

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  • 3. 

    What is the lowest closing price level attained by a December corn futures contract since 1980?

    • A. $1.89½

    • B. $1.81

    • C. $1.63¾

    • D. $1.51¼

    Correct Answer
    A. D. $1.51¼
    Explanation
    Answer: In 1986, the December contract went off the board (i.e., expired) at a price of $1.51¼. For perspective, the December’08 corn contract increased more than $1.50 in an 11-day period in May and June of 2008.

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  • 4. 

    Since 1980, what has been the largest carryout of U.S. corn at the end of a crop year, in terms of a stocks/use ratio?

    • 97%

    • 65%

    • 42%

    • 29%

    Correct Answer
    A. 65%
    Explanation
    We ended the 1986/87 crop year with a corn stocks/use ratio of 65%. Persistently large ending stocks in the mid-1980’s led to a number of major policy changes in agriculture. For the record, since 1988 there have been only two years with an ending stocks/use ratio above 20%.

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  • 5. 

    What is the highest closing price level ever attained by a November (i.e., new crop) soybean futures contract?

    • A. $17.24

    • A. $17.01¼

    • A. $16.73

    • D. $16.35½

    Correct Answer
    A. D. $16.35½
    Explanation
    The highest closing price level ever attained by a November soybean futures contract is $16.35½.

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  • 6. 

    What do you call an options trading strategy involving the simultaneous purchase of an at-the-money call and sale of an out-of-the-money call?    

    • A. Short straddle

    • B. Bull call spread

    • C. Long strangle

    • D. Call ratio backspread

    Correct Answer
    A. A. Short straddle
    Explanation
    A bull call spread in options involves the simultaneous purchase of an at-the-money call and sale of an out-of-the-money call. Purchasing an at-the-money call option – the right to buy futures – positions a trader to profit from rising prices. Selling an out-of-the-money call creates a bull spread that lowers the cost of the transaction but also limits the upside potential.

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  • 7. 

    The United States exports about 2 billion bushel of corn each year. Which country or trading bloc is the largest buyer of U.S. corn?

    • A. China

    • B. European Union

    • Mexico

    • Japan

    Correct Answer
    A. Japan
    Explanation
    Answer: Japan is the largest single buyer of U.S. corn, buying 15 mmt each year. South Korea and Mexico are also large buyers of corn from the United States. The European Union is a very small buyer of U.S. corn.

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  • Current Version
  • Feb 28, 2025
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 12, 2010
    Quiz Created by
    Ed-usset
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