Question: 12. Question: given the above information, when does BBB (with Short position in futures) experience a Margin Call? (A) BBB experiences a margin call at

12. Question: given the above information, when does BBB (with Short position in futures) experience a Margin Call? (A) BBB experiences a margin

12. Question: given the above information, when does BBB (with Short position in futures) experience a Margin Call? (A) BBB experiences a margin call at Time 2 only (B) BBB experiences a margin call at Time 3 only (C) BBB experiences margin calls at Time 2 and Time 3 (D) BBB does not experience any margin call from Time 1 to Time 3 Answer: Questions 1 continued next page 5 13. A speculator is predicting a significant and persistent decrease in Silver prices in the future. This speculator should: (A) short Futures contract on Silver (B) long Futures contract on Silver (C) buy Silver in the spot market (D) long Forward contract on Silver 14. The market is in Backwardation when: (A) Spot Price and Futures Price are unrelated (B) Spot Price is lower than Futures Price (C) Spot Price is higher than Futures Price (D) Spot Price is equal to Futures Price Answer: 15. For Futures contract, the largest loss is a: (A) One-day movement in the Futures Price (B) One-week movement in the Futures Price (C) One-month movement in the Futures Price (D) One-year movement in the Futures Price Answer: 12. Question: given the above information, when does BBB (with Short position in futures) experience a Margin Call? (A) BBB experiences a margin call at Time 2 only (B) BBB experiences a margin call at Time 3 only (C) BBB experiences margin calls at Time 2 and Time 3 (D) BBB does not experience any margin call from Time 1 to Time 3 Answer: Questions 1 continued next page 5 13. A speculator is predicting a significant and persistent decrease in Silver prices in the future. This speculator should: (A) short Futures contract on Silver (B) long Futures contract on Silver (C) buy Silver in the spot market (D) long Forward contract on Silver 14. The market is in Backwardation when: (A) Spot Price and Futures Price are unrelated (B) Spot Price is lower than Futures Price (C) Spot Price is higher than Futures Price (D) Spot Price is equal to Futures Price Answer: 15. For Futures contract, the largest loss is a: (A) One-day movement in the Futures Price (B) One-week movement in the Futures Price (C) One-month movement in the Futures Price (D) One-year movement in the Futures Price

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