Series 3: Exercise

Exercise

Answer true or false.

1. 1. _____ Each party to a futures transaction must have an account with a clearing firm or with another futures commission merchant that has an account with a clearing firm.
2. 2. _____ The clearinghouse serves as the counterparty to each side of every futures transaction.
3. 3. _____ The initial margin requirement for a futures trading account can never exceed that required by an exchange.
4. 4. _____ In a futures contract, a new settlement price is determined at the close of each business day, and the account is adjusted accordingly.
5. 5. _____ If an investor’s account falls below the minimum maintenance requirement, it is that investor’s responsibility to meet the initial margin requirement by the following day.
6. 6. _____ When a futures contract goes to delivery, the holder of the long position receives the commodity.
7. 7. _____ Most futures contracts do not end in the delivery of the product.
8. 8. _____ A buyer who holds a transferrable notice must always accept delivery of commodities.
9. 9. _____ A basis grad