1. Motivation for investing in commodities or commodity securities is that:
(I) they have high correlation with the stock and bond
(II) generally they have low to negative correlation with stock & bond
(III) generally they have positive correlation with inflation
a. (I) & (II)
b. (I) & (III)
c. (II) & (III)
2. You would like to protect your portfolio of British equity against a downward movement of the British stock market. Which derivative can be used to achieve this?
(I) Futures
(II) Call Options
(III) Put Options
a. (I) and/or (II)
b. (II) and (III)
c. (I) and/or (III)
3. The December futures contract of the Australian ASX index quotes at 4,050. The multiple is 25 AUD. The next day, this contract quotes at 4,070. What is the gain/loss for an investor short in one contract?
a. A$500
b. A$(500)
c. A$20