Please see attached file.
Chapter 17 (1, 2, 5, & 11)
1. The open interest on a futures contract at any given time is the total number of outstanding:
2. Unhedged positions.
3. Clearinghouse positions.
4. Long and short positions.
2. In futures trading, the minimum level to which an equity position may fall before requiring additional margin is most accurately termed the:
1. Initial margin.
2. Variation margin.
3. Cash flow margin.
4. Maintenance margin.
5. Why is there no futures market in cement?
11. In each of the following cases, discuss how you, as a portfolio manager, could use financial futures to protect a portfolio.
1. You own a large position in a relatively illiquid bond that you want to sell.
2. You have a large gain on one of your long Treasuries and want to sell it, but you would like to defer the gain until the next accounting period, which begins in four weeks.
3. You will receive a large contribution next month that you hope to invest in long-term corporate bonds on a yield basis as favorable as is now available.
The solution explains some questions relating to futures
Risk Management - 9 questions
During my study on my Master Degree Risk Management course, I am facing below key questions from my Risk Management professor, can you please provide in-depth answers to below? (like around 200 words answers for each question)
1) Why banks are critical institutions especially from Risk Management perspective
2) What are the profitability landscape for banks after Lehman crisis, from Risk Management perspective
3) What are the key differences between Forwards (OTC derivatives) and Futures (Exchanged Traded Derivatives), again.... from Risk Management perspective
4) What are the key objectives of new regulations for derivatives
5) What are the Key functions in Global Market Value Chain, from Market Risk perspective
6) What are the Evolution in metrics for Market Risk?
7) What are the Risk mitigations for Counterparty Credit risk.
8) Differences between Market liquidity Risk versus Funding Liquidity Risk.
9) What are the root causes for liquidity problems in financial institutions during the financial crisis.
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