1. A CME contract on €125,000 with September delivery
A. is an example of a forward contract.
B. is an example of a futures contract. C.
is an example of a put option.
D. is an example of a call option.
2. Yesterday, you entered into a futures contract to buy €62,500 at $1.50 per €. Suppose the futures price closes today at $1.46. How much have you made/lost?
A. Depends on your margin balance.
B. You have made $2,500.00.
C. You have lost $2,500.00.
D. You have neither made nor lost money, yet.
3. Comparing "forward" and "futures" exchange contracts, we can say that
A. they are both "marked-to-market" daily.
B. their major difference is in the way the underlying asset is priced for future purchase or sale: futures settle daily and forwards settle at maturity.
C. a futures contract is negotiated by open outcry between floor brokers or traders and is traded on organized exchanges, while forward contract is tailor-made by a foreign exchange dealer for its clients and is traded OTC.
D. both b) and c)