1. Explain what is meant by "marked to market."
2. a) What are the primary motives for a hedger in the derivatives market?
3. b) What are the primary motives for a speculator in the derivatives market?
4. In general, do speculators increase the risk of futures markets? Explain.
5. If an agricultural producer would like to lock in the price of his products when taking them to the
6. market, should he go long or short in the futures contract?
7. Why would a company want to enter into an interest rate swap?
8. Go to the website for the Chicago Mercantile Exchange www.cmegroup.com and find the following
9. information for the Coal (API4) FOB Richards Bay (ARGUS-McCloskey) futures contract. a) Product code
10. b) Contract unit
11. c) Price Quotation information