Questions from Financial Markets

Q: Describe stock index futures. How could they be used by a

Describe stock index futures. How could they be used by a financial institution that is anticipating a jump in stock prices but does not yet have sufficient funds to purchase large amounts of stock? E...

Q: Explain systemic risk as it relates to the futures market. Explain

Explain systemic risk as it relates to the futures market. Explain how the Financial Reform Act of 2010 attempted to improve the monitoring of systemic risk in the futures market and other markets.

Q: Explain the use of circuit breakers.

Explain the use of circuit breakers.

Q: Describe a put option on interest rate futures. How does it

Describe a put option on interest rate futures. How does it differ from selling a futures contract?

Q: How do speculators use call options? Describe the conditions under which

How do speculators use call options? Describe the conditions under which their strategy would backfire. What is the maximum loss that could occur for a purchaser of a call option?

Q: How do speculators use put options? Describe the conditions under which

How do speculators use put options? Describe the conditions under which their strategy would backfire. What is the maximum loss that could occur for a purchaser of a put option?

Q: If liquidity and interest rate expectations are both important for explaining the

If liquidity and interest rate expectations are both important for explaining the shape of a yield curve, what does a flat yield curve indicate about the market’s perception of future interest rates?...

Q: Describe a call option on interest rate futures. How does it

Describe a call option on interest rate futures. How does it differ from purchasing a futures contract?

Q: Markus Company purchases supplies from France once a year. Would Markus

Markus Company purchases supplies from France once a year. Would Markus be favorably affected if it establishes a currency swap arrangement and the dollar strengthens? What if it establishes a currenc...

Q: Explain basis risk as it relates to a currency swap.

Explain basis risk as it relates to a currency swap.