Questions from General Investment

Q: Discuss how stock index futures can be used for speculation and for

Discuss how stock index futures can be used for speculation and for hedging. What advantages are there to speculating with stock index futures rather than specific issues of common stock?

Q: What is fundamental analysis? Does the performance of a company have

What is fundamental analysis? Does the performance of a company have any bearing on the value of its stock? Explain.

Q: What are futures options? Explain how they can be used by

What are futures options? Explain how they can be used by speculators. Why would an investor want to use an option on an interest rate futures contract rather than the futures contract itself?

Q: Discuss the difference between a cash market and a futures market.

Discuss the difference between a cash market and a futures market.

Q: Briefly discuss holding period return (HPR) and yield as measures

Briefly discuss holding period return (HPR) and yield as measures of investment return. Are they equivalent? Explain.

Q: What is the major source of return to commodities speculators? How

What is the major source of return to commodities speculators? How important is current income from dividends and interest?

Q: Why are both hedgers and speculators important to the efficient operation of

Why are both hedgers and speculators important to the efficient operation of a futures market?

Q: Explain how margin trading is conducted in the futures market.

Explain how margin trading is conducted in the futures market. a. What is the difference between an initial margin and a maintenance margin? b. Are investors ever required to put up additional margin?...

Q: List and briefly define the five essential parts of a commodities contract

List and briefly define the five essential parts of a commodities contract. Which parts have a direct bearing on the price behavior of the contract?

Q: Briefly define each of the following: a. Settlement price

Briefly define each of the following: a. Settlement price b. Daily price limit c. Volume d. Maximum daily price range e. Delivery month