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Series 3 Unit 1 Questions and answers already passed 2024
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Series 3 Unit 1 Questions and answers already passed 2024
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Series 3 Unit 1 QuestionsA futures contract is legally binding, but it does not always require the original
seller to make or take delivery.
A. True
B. False - correct answer ✔A. True
Forward contracts differ from futures contracts in that:
A. They are non-standardized
B. They are not regulated by the CFTC
C. Their prices are not set in a competitive market
D. All of the above - correct answer ✔D. All of the above
To offset a long futures position, a trader must:
A. liquidate the purchase of a (long) futures contract by selling an equal
number of contracts of the same delivery month on the same exchange
B. liquidate the purchase of a (long) futures contract by selling an equal
number of contracts of the same delivery month on any exchange
C. recognize that only short positions can only be offset
D. never transfer the obligation to others - correct answer ✔A. liquidate the
purchase of a (long) futures contract by selling an equal number of contracts
of the same delivery month on the same exchange
The efficiency of a futures market is primarily determined by the:
, A. number of active traders
B. leadership skills of exchange officials
C. availability of cash supplies
D. required margin amounts - correct answer ✔A. number of active traders
The price of a futures contract is determined by:
A. the exchange
B. the CFTC
C. prearranged agreements between the floor brokers
D. open bids and offers on the exchange floor - correct answer ✔D. open
bids and offers on the exchange floor
Hedging is using a futures contract (or a futures option) to reduce risk that you
normally would have in relation to a particular commodity.
A. True
B. False - correct answer ✔A. True
Hedging is making money in the futures contract to offset what you are losing
in what you will own or acquire.
A. True
B. False - correct answer ✔True
In which of the following circumstances are carrying charges not important?
A. Copper
B. Live Hogs
C. Cotton
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