Management 3460Y-Global Fsancial Mansgrmest Quiz W2-Nov. 20, 2017 Instrecter: Grahame Newton Maltiple Cheice 1. Suppose the Canadian Wheat Pool wants to hedge a US dollar payable using futures contracts that trade on the Chicags Mercantile exchange A. The Wheat Pool should buy Canadian dollar futures B. The Wheat Pool should sell Canadian dellar futures C. The Wheat Pool cannot hedpe this position D. The Wheat Pool should not use the Chicago Mercantile exchange. 2. Which of the following swaps are also known as "plain varilla" swap? A. "Fixed-for-fixed" single currency swap B. "Fixed-for-floating" single currency swap D. "Floating-for- floating" curency swap involving two different currencies 3. Which of the following statements is truc? A. The buyer of a forward contract holds a short position. B. The buyer of a futures contract holds a short position C. The buyer of a forward contract holds a winning position D. The buyer of a futures contract holds a long position. 1. You have one short position in foreign exchange futures contracts on Es. The contract size is 100,000. During the day the futures exchange rate (measured in S/E) increased by $0.01/5 while the spot exchange rate decreased by 0.01. As a result you A. have gained $1,000 B. have lost $1,000 C. have neither gained nor lost any money D. are unable to answer based on the information provided. 5. The "open interest shown in currency futures quotations is: A. the total number of people indicating interest in buying the contracts in the near Suture. B, the total number of people indicating interest in selling the contracts in the near future. C. the total number of people indicating interest in buying or selling the contracts in the near D. the total number of long or short contracts outstanding for the particular delivery month. future. 6. An "option" is A. a contract giving the seller (writer) the right, but not the obligatios, to buy or sell a given quantity of an asset at an specified price at some time in the future. B. a contract giving the owner (buyer) the right, but not the obligation, to buy or sell a given quantity of an asset at a specified price at some time in the future. C. not a derivative, nor a contingent claim, security D. unlike a futures or forward contract 7. An investor believes that the price of a stock, say IBM's shares, will increase in the next 60 days. If the investor is correct, which combination of the following investment strategies will show a profit in all the choices? - buy the stock and hold it for 60 days i)- buy a put option ist)-sell (write) a call option iv) - buy a call option fv) - sell (writej a put option A. (0), (l), and (ii) B. (0, (ii), and (iv) C. (0), (iv), and (v) D. (i) and (i)
