1. Which of the following statement is NOT true?

a. Falling spot price is favorable to short position.

b. Short position will only receives margin call if the spot price is smaller than forward price.

c. The counter party of long position will received margin call if the futures goes up.

d. The opposite of short will benefit if the spot price is greater than forward price.

2. A ______________ is an order instructing a broker to sell at a specified price below the market price.

a. market order

b. sell-stop order

c. limit order

d. day order

3. Margining process and daily-marking-to-market:

a. Process of determining the futures correct price.

b. Overcome the counter-party risk.

c. Important to minimize the price risk.

d. Helps in the process of selecting the derivative securities.