1. An Option contract that can only be exercised on the expiration date is called a (an) __________ option.
a. put
b. call
c. American
d. European
2. A more accurate measure of the change in bond price due to changes in yield to maturity can be found using both modified duration and __________.
a. Macaulay duration
b. time to maturity
c. convexity
d. conversion premium
3. One CBOT corn futures contract trades in units of 5,000 bushels and the minimum initial margin is $2,500 per contract. On July 17, 2013, the Sep '13 CBOT corn futures contract settled at $6.50 per bushel. Calculate the amount of leverage inherent in the futures contract using the minimum initial margin.
a.14
b. 15
c. 13
d. 12