1. What is the word used to describe the tendency for prices of physical commodities and futures prices to approach one another during the delivery month? a. Divergence b. Arbitrage c. Pyramiding d. Proximating e. Convergence 2. What happens if your commodities account equity falls below initial margin? a. The account holder is warned that the equity balance is getting low. b. Nothing happens unless Maintenance Margin is violated also. c. The account holder is asked to deposit more equity. d. The account holder is warned and then positions are liquidated at the open of the next trading day 3. Which of the following is true? a. Buying a futures contract is the same as buying the commodity now. b. Selling a futures contract is the same as selling it now. c. Buying and selling has no effect now, it depends on future value to determine if it is long or short. d. Selling short means selling the nearest contract month. 4. Which is true? a. A hedger uses future contracts to protect against price movement b. A speculator uses a futures contract to protect against price movement c. A hedger uses a futures contract to profit from future price movement d. A speculator will short a contract if it is expected to increase IN PRICE 5. The amount deposited in a futures account before entering a futures contract is called: a. Required margin b. Initial margin c. Market margin d. Maintenance margin 6. Opening a position means a. Buying a contract b. Selling a contract c. Either buying or selling contracts which reduces equity exposure d. Either buying or selling which increases equity exposure