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Question and Answer Bank in Financial Markets - Part 6

(200 questions and answers)

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1. As the market price increase, the premium on an put option ______________. {Derivatives}
   1. Decreases
   2. Cannot say
   3. Remains the same
   4. Increases



2. Let's suppose that NIFTY is trading at 11,000 on 1st August 2020. A NIFTY call option with Sep 2020 Expiry with a strike of 10,500 is trading at Rs. 800. What is the option's time value?. {Derivatives}
   1. Rs. 500
   2. Rs. 1,000
   3. Rs. 600
   4. Rs. 300



3. Futures contracts: (Select all that apply). {Derivatives}
   1. Requires the opening of a futures account
   2. Are derivative instruments
   3. Trade on securities exchanges
   4. Pay dividends



4. Is the seller of a E-mini S&P 500 futures contract obligated to pay dividends to the long holder?. {Derivatives}
   1. True
   2. False



5. The performance bond margin on a futures contract is. {Derivatives}
   1. 50% of the contract
   2. 100 percent of the value of the contract
   3. 3-5% of the value of the contract



6. Futures margin requirements are typically. (Select all that apply) {Derivatives}
   1. Determined by the trader
   2. Greater than stock margin requirements
   3. Less than stock margin requirements
   4. Based on contract notional amount and volatility



7. CME Group futures markets are typically open ____________ (Central Time). {Derivatives}
   1. Monday morning - Friday afternoon; 10 hours per day
   2. Sunday evening - Friday afternoon; 23 hours per day
   3. Sunday morning - Saturday afternoon; 10 hours per day
   4. Monday morning - Friday afternoon; 23 hours per day



8. CME Group offers futures contracts in which of the following asset classes? (Select all that apply) . {Derivatives}
   1. Foreign Currencies
   2. Treasuries
   3. Precious Metals
   4. Individual Stocks



9. Futures ticket symbols are identical to stock ticker symbols. {Derivatives}
   1. True
   2. False



10. There are tax efficiencies for future traders in the US that are not available to stock traders. {Derivatives}
    1. True
    2. False



11. Futures can be traded out of a Securities account?. {Derivatives}
    1. True
    2. False



12. Assume it's September 30, what is the front month trading in Gold (GC) futures?. {Derivatives}
    1. October
    2. December
    3. November
    4. September



13. Assume it's October, what is the front month trading in Micro E-mini Russell 200 (M2K) futures?. {Derivatives}
    1. June
    2. March
    3. September
    4. December



14. Assume it's January 30, what is the front month trading in WTI Crude Oil (CL) futures? {Derivatives}
    1. March
    2. December
    3. January
    4. February



15. Assume it's September 12, what is the front month trading in Gold (GC) futures? {Derivatives}
    1. November
    2. December
    3. September
    4. October



16. A ticker symbol will indicate various pieces of information about the contract. Please select all of the correct features based on this ticket symbol ESMO. {Derivatives}
    1. Trading Venue: E is for Electronic
    2. Month: M is for June
    3. Product: ES is the E-mini S&P 500
    4. Year: 0 is for 2020
    5. Month: 0 is for January



17. When trading a futures contract, the only variable unknown to the trader is price. {Derivatives}
    1. True
    2. False



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