1. A forward price may be used for: a) Hedging price exposure at a future date b) Speculating one price. c) Locking-in a price for a future transaction. d) All of the Above e) None of the Above 2. Which of the following statements about forwards is false? a) A down payment is typically made at inception of a for b) A forward contract maybe settled in cash at maturity. c) A future contract is like a forward contract that is exchange-traded cositive, negative, d) The pay c) None of the above 3) In the absence of arbitrage, the futures price at maturity should equal: a) The price at inception plus interest rate on the margin account for the period of the contract. b) The price at inception plus the storage cost for the asset over the contract period. c) The spot price of the underlying asset at inception. d) The price of the underlying asset minus the storage cost. e) None of the above. 4) A replicating portfolio for a derivative security: a) A portfolio consisting of a long and short positions in the derivative. b) A portfolio that has the same payoffs at least as greater as, and in some states greater than, the payoffs from the derivative. c) A portfolio that has the same payoffs as the derivatives. d) A portfolio that combines the derivative with another derivative on the same underlying so as to make the portfolio riskless. e) None of the above. 5) Stock A has a spot price of S50. It is expected to approciate by 2% over the next quarter. The risk-free rate for the next quarter is 2% in continuously compounded and annualized terms, and the quarterly continuous dividend payment is also 2% in continuously-compounded and annualized terms. The three-month forward price is (a) 550.00 (b) $50.25 (c) $50.50 (d) $50.75