1- Which of the following is not a characteristic of a futures contract?
a- Futures contract size is standardized in currency amount.
b- Futures settlements are made daily via the exchange’s clearinghouse.
c- Trading prices of the currency futures are disseminated continuously by the exchange.
d- Futures market participants usually are known to one another.
e- All of the above are characteristic of a future contract.
2- Under a simple hedge with futures, when futures contract exists on the foreign currency you wish to hedge, what is implied hedge ratio?
a- - infinity
b- -1
c- 0
d- +1
e- + infinity
3- which of the following is not a problem that arises when hedging with futures?
a- Contract size is fixed and unlikely to match the position hedged
b- The expiration dates of futures contract relay match those of the currency
c- Size of the basis change is unpredictable expect at expiration
d- Choice of underlying assets in futures market is limited and may not match those being hedged
e- All of the above are problems that arise when hedging with futures