Question 1 You believe crude oil price will be going to decrease and short 1 contract of oil today (a crude oil contract size is 1,000 barrels per contract). The current future price for delivery in March is $38 per barrel. If crude oil price turns out to be $35.50 per barrel at the contract maturity date, whats your profits/losses? A. $5,000 B. $3,000 C. $2,000 D. $4,000

QUESTION 2 Suppose the initial margin requirement for the oil contract is 20%. Contract size is 1000 barrels. Current future price for march is $62.48. If the spot oil price at maturity date is 65.48, and you only invest on oil commodity and dont use future contract, whats your return if you buy the oil? A. $31.25 B. $32.37 C. $38.47 D. $41.32

QUESTION 3 If you hold a $20m bond portfolio with modified duration of 9 years. You expected the market interest rate increase by 10 basis points (0.10%), whats your profits/losses? A. $100,000 B. $150,000 C. $180,000 D. $200,000

QUESTION 4 Suppose the initial margin requirement for the oil contract is 40%. Contract size is 1000 barrels. Current future price for march is $30. If the spot oil price at maturity date is 36, whats your return if you long the contract? If you only invest on oil commodity and dont use future contract, whats your return if you buy the oil? A. 25%, 30% B. 50%, 20% C. 20%, 50% D. 30%, 25%

QUESTION 5 Suppose the initial margin requirement for the oil contract is 25%. Contract size is 1000 barrels. Current future price for march is $62.48. If the spot oil price at maturity date is 65.48 and whats the leverage ratio from using oil futures to the one you only invest on oil commodity and dont use future contract? A. 2.0 B. 3.0 C. 4.0 D. 5.0

QUESTION 6 Using local currency returns, the S&P 500 has the highest correlation with A. Euronext. B. FTSE. C. Nikkei. D. Toronto.

QUESTION 7 In a particular year, Razorback Mutual Fund earned a return of 1% by making the following investments in asset classes: Weight Return Bonds 20 % 5 % Stocks 80 % 0 % The return on a bogey portfolio was 2%, calculated from the following information. Weight Return Bonds (Lehman Brothers Index) 50 % 5 % Stocks (S&P 500 Index) 50 % -1 % The contribution of asset allocation across markets to the Razorback Fund's total excess return was A. -1.80%. B. -1.00%. C. 0.80%. D. 1.00%.

QUESTION 8 The performance of an internationally-diversified portfolio may be affected by A. country selection. B. currency selection. C. stock selection. D. All of the options are correct.

QUESTION 9 The yield on a 1-year bill in the United Kingdom is 6%, and the present exchange rate is 1 pound = US$2. If you expect the exchange rate to be 1 pound = US$1.95 a year from now, the return a U.S. investor can expect to earn by investing in U.K. bills is approximately __________. A. -3% B. 3% C. 3.35% D. 8.72%

QUESTION 10 A person with a long position in a commodity futures contract wants the price of the commodity to ________. A. decrease substantially B. increase substantially C. remain unchanged D. increase or decrease substantially