GSC ABC School: Position Reports

10 Questions | Total Attempts: 76

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Marketing Quizzes & Trivia

Chapter 5


Questions and Answers
  • 1. 
    Which of the following choices are some of the fundamental objectives of a grain merchandiser?
    • A. 

      Get rich by any means necessary

    • B. 

      To shield his/her business from losses due to price risk

    • C. 

      To increase his/her profit margins by capitalizing on favorable basis movements

    • D. 

      Buy high, sell low

  • 2. 
    Each of the major types of risk are unaffected by futures market movement
    • A. 

      True

    • B. 

      False

  • 3. 
    What is the term for when a firm takes a long or short position in futures ahead of an anticipated cash transaction?
    • A. 

      Futures exchange

    • B. 

      Prehedge

    • C. 

      Spread

  • 4. 
    Which factor has reduced but not eliminated the use of prehedging?
    • A. 

      Mini contracts

    • B. 

      Unpredictable weather

    • C. 

      The "cloud"

    • D. 

      Overnight electronic trading

  • 5. 
    Which of the following does have basis risk?
    • A. 

      Delayed price (DP) inventory

    • B. 

      HTA contracts

    • C. 

      Grain with storage obligations against it

    • D. 

      All of the above

    • E. 

      None of the above

  • 6. 
    A key component of managing risk is to keep track of all company positions including inventory, purchases, sales, and hedges.
    • A. 

      True

    • B. 

      False

  • 7. 
    A report for management which purpose is to provide information on the company's exposure to price and basis risk is known as what?
    • A. 

      Equity run

    • B. 

      Monthly statement

    • C. 

      Report card

    • D. 

      Position report

  • 8. 
    Which of the following is NOT a function of the merchandising position log?
    • A. 

      To be a permanent, centralized record of all priced long/short transactions

    • B. 

      To help you in tracking current and future market movement

    • C. 

      To keep your price-risk position "up to the minute"

    • D. 

      To serve as a cross-check to the daily position report, calculated the "standard" way

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