1. Assume you have a short futures contract for July silver at a price of $20 per ounce. If the July spot price was $17 you would lose $3.
True
False
2. If the 3-month US$/Euro futures rate is roughly the same as the spot rate, we know the short-term interest rate in Euros is very similar to US short-term rate.
True
False
3. An investor with a long position in fixed-rate government bonds could hedge her risk by buying bond futures.
True
False
4. Futures contracts expose the investor to basis risk.
True
False
5. The March futures price of the Nikkei 225 is a good forecast of the index’s value in March.
True
False