S4 4.1

Question 1

What is a futures contract

Answer 1

Legally binding contract to buy/sell commodity on future specified date

Question 2

What parts of a futures contract are standardized?

Answer 2

1) Quantity
2) Quality
3) Delivery

Question 3

Are Margin requirements standardized for all contracts?

Answer 3

Nope

Question 4

Is the price on all future contracts standardized?

Answer 4

Nope

Question 5

Where must futures be traded?

Answer 5

ONLY in an exchange

Question 6

What is the role of the Clearing house in a futures contract?

Answer 6

Clearing house is the Guarantor - guarantee performance of the trade

Question 7

How is the value of a contract held current?

Answer 7

Mark to Market

Question 8

Are Financial and Commodity futures considered Securities?

Answer 8

Nope