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    Futures questions

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    Chapter 17 (1, 2, 5, & 11)

    1. The open interest on a futures contract at any given time is the total number of outstanding:

    1. Contracts.
    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.

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    Solution Summary

    The solution explains some questions relating to futures