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1. Standardized futures contracts exist for all of the following underlying assets except:
A. Stock indexes.
B. Treasury bonds.
D. Common stocks.
2. Which one of the following actions will offset a long position in a futures contract that expires in June?
A. Sell a futures contract that expires in June.
B. Hold the futures contract until it expires.
C. Sell any futures contract, regardless of its expiration date.
D. Buy any futures contract, regardless of its expiration date.
3. Which of the following does the most to reduce default risk for futures contracts?
A. High liquidity.
B. Flexible delivery arrangements.
C. Flexible delivery arrangements.
D. Marking to market.
4. Which of the following has the right to sell an asset at a predetermined price?
A. A call buyer.
B. A put buyer.
C. A put writer.
D. A call writer.
5. Which of the following is most similar to a stock broker?
A. Futures commission merchant.
C. Pit trader.
D. Floor broker.
Answers: 1 (D), 2 (A), 3 (D), 4 (B), 5 (A)
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