_________ take positions in futures to reduce their risks related to future movements in interest rates or stock prices.Select one:a. Speculatorsb. Position tradersc. Day tradersd. Hedgers

In the futures markets, speculators take on extra risk in futures markets as a result of the actions of:Question 7Select one:a.tradersb.brokersc.day tradersd.hedgers

In futures markets investors who expect to purchase future bonds can reduce the risk of price fluctuations by taking a/an:Question 8Select one:a.arbitrage position on futures contracts.b.long position on futures contracts.c.short position on futures contracts.d.marked-to-market position on futures contracts.

6.You are the treasury manager of a bank and you know that the bank will need to borrow.$15 million for 3 months in two months time.Interest rates are currently 6.8% and the current quoted price for bank accepted bills futures contracts expiring in 3 months is 92.4.(Assume 30 days each month,365 days in a year,and futures contracts have a standard $1 million face value) (a)Today,what position would you take in the futures market to hedge this risk? Enter"1"for buy/long futures contracts or "2" for sell/short futures contracts (b)After two months,interest rates fall to 6.55% and the quoted price for bank-accepted bills futures contracts is 92.9. What is the profit or loss on the futures market?(for a loss enter a negative number) $ (round your answer to two decimal places) What is the profit or loss on the physical market?(for a loss enter a negative number) $ (round your answer to two decimal places) (c)Was this a perfect hedge? Enter"1"for yes and "2"for no

Which of the following statements about futures are false:I. Long position occurs when the futures contract is initially sold and subsequently bought in future;II. In Australia bonds futures are usually quoted at an index figure of 100 minus the yield so a dealer can follow a basic principle of buy low and sell high;III. Novation is the process to renew futures contracts when they fall due;IV. Short position implies selling asset at a future date and correspondingly selling futures contract today.

Which of the following is TRUE? To hedge a natural short position with futures, the hedger should: a. Initially sell the futures contract and then buy the same contract at the delivery date. b. Initially buy the futures contract and then sell the same contract before the delivery date. c. Initially buy the futures contract and then sell the same contract after the delivery date. d. Initially buy the futures contract and then sell the same contract at the delivery date.