QUESTION $17$

$q,$ was the first organized exchange to trade options, in $1973.$

a$.$ The New York Stock Exchange

b$.$ The American Exchange

c$.$ The Chicago Board Option Exchange

d$.$ The International Securities Exchange

e$.$ None of the above

QUESTION $18$

Interest rate swaps are

structured than futures and options contracts.

a$.$ usually less

b$.$ usually more

c$.$ always more

d$.$ Never less

QUESTION $19$

An arbitrage is trading in

a$.$ options and futures at the same time.

b$.$ two different markets when the price of the same item is different.

c$.$ two different markets when the price of two different items is the same.

d$.$ two different markets when there is no correlation between the markets.

e$.$ None of the above

QUESTION $21$

Stock index futures and options are sometimes referred to as derivative products because they

a$.$ are often used as part of program trading.

b$.$ make the market less volatile.

c$.$ have intrinsic characteristics.

d$.$ derive their existence from actual market indexes.

QUESTION $23$

A major disadvantage of using call options to hedge a short position is that

a$.$ hedging increases the risk of loss on the short sale.

b$.$ the option premium and commission reduce profit potential.

c$.$ the price of the stock may go up$.$

d$.$ none of the above.

QUESTION $25$

The New York Futures Exchange specializes in $q,$

a$.$ transactions involving companies listed on AMEX and NYSE.

b$.$ American$-$produced commodities.

c$.$ financial futures.

d$.$ grains and livestock.

e$.$ More than one of the above

QUESTION $26$

The margin requirement will be lower than the standard requirement on a stock index futures contract when:

a$.$ the stock market is declining.

b$.$ the futures are used to hedge a portfolio.

c$.$ the investor is establishing a speculative position.

d$.$ None of the above

QUESTION $27$

Hedging is the basic reason for the existence of the commodity exchanges.

A$.$True

B$.$False