Question 5

When is a good situation to use futures or forward contract?

Question 5 options:

You believe Coca-Cola stock will rise steadily for next few years, but you don't know if the entire stock market would be even stronger or not.

A utility company has signed a contract to provide energy for clients at a fixedprice for next ten years.

A US company, like MDLZ (formerly part of Kraft Foods), receives most of its revenue outside the U.S., and also spends that money overseas.

None of the above.

Question 7

Which of the following regarding the mark-to-market (i.e., daily settlement) process is NOT true?

Question 7 options:

	When margin account value is higher than the initial margin, the trader can withdraw some money.
	When margin account value is lower than the initial margin, the trader must add some money or face a forced liquidation.
	When margin account value is lower than the maintenance margin, a margin call is triggered.
	None of the above.