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BU8300 - Financial Risk Management
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Forward contracts __________ traded on an organized exchange, and futures contracts __________ traded on an organized exchange.
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__________ are likely to close their positions before the expiration date, while __________ are likely to make or take delivery.
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A dates farmer decides to sell dates futures. This is an example of __________ to limit risk.
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The fact that the exchange is the counterparty to every futures contract issued is important because it eliminates __________ risk.
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Margin requirements for futures contracts can be met by __________.
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Interest rate swaps involve the exchange of __________.
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A long hedge is a simultaneous __________ position in the spot market and a __________ position in the futures market.
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A long hedger will __________ from an increase in the basis; a short hedger will __________.
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A company that mines bauxite, an aluminium ore, decides to short aluminium futures. This is an example of __________ to limit its risk.
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The daily settlement of obligations on futures positions is called __________.
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