6. Hedging: a. Is taking a futures position identical to one's cash market position b. Can protect a cash price because cash prices and futures prices do not rise and fall at the same time c. Is the use of the futures market as a temporary substitute for a later cash market transaction d. None of the above 7. The purpose of margin in futures trading is: a. To cover the cost of executing a trade b. To provide a down payment c. To provide a performance bond d. None of the above 8. A participant in the futures market may be subject to demands for additional margin if: a. He has a long futures position and prices increase b. He has a long futures position and prices decrease c. He has a short futures position and prices remain unchanged d. He has a short futures position and prices decrease 9. Margin requirements for customers are established by: a. The Federal Reserve Board b. The Commodity Futures Trading Commission c. Brokerage firms, subject to exchange minimums d. The Clearing Corporation e. Agreement between buyer and seller 10. Futures trading gains credited to a customer's margin account can be withdrawn by the customer: a. Only if the gains exceed the margin requirement b. Only when the futures position is liquidated c. Only when the account is closed d. Only at the end of the month 11. A farmer's crop is still in the field. His cash market position is: a. Long b. Short c. Neither, since the crop has not been harvested d. Neutral, because he has no position in the futures market