GSC ABC School: Position Reports
Chapter 5
- 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
Questions: 100 | Attempts: 14516 | Last updated: Oct 7, 2020
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