1. Which of the following is the function of the market maker in the futures market?

1. a. To act as the middle man of the buyers and sellers of the futures contracts.
2. b. To provide buy and sell orders to the less active futures contracts.
3. c. To calculate the margin requirement in futures contract.
4. d. To calculate the margin account levels of the investors.

 

2. Which of the following correctly describe forward contracts and futures contracts?

1. I. Forward contracts are private contracts.
2. II. Futures contracts are standardized contracts.

 

1. I only
2. II only
3. Both I and II
4. Neither I nor II

 

3. Which of the following is(are) correct?

1. I. Derivatives can be used to hedge price risk.
2. II.Derivatives can be used to hedge credit risk.

 

1. I only
2. II only
3. Both I and II
4. Neither I nor II

Answer rating: 100% (QA)

Q1 Ans A market maker sometimes called a designated broker DB is a brokerdealer or investment firm that plays an essential role in how an ETF trades and ensures the continued and efficient exchange of ... View the full answer