A Company Enters into a Long Futures Contract to Buy

question 10

Multiple Choice

A company enters into a long futures contract to buy 1,000 units of a commodity for $60 per unit.The initial margin is $6,000 and the maintenance margin is $4,000.What futures price will allow $2,000 to be withdrawn from the margin account?

• A) $58
• B) $62
• C) $64
• D) $66

Evaluate the performance of different types of investment funds, including actively-managed, index, and broker-sold funds.

Understand the different pricing models in financial markets, specifically the CAPM (Capital Asset Pricing Model) and APT (Arbitrage Pricing Theory).

Learn how to identify arbitrage opportunities in financial markets.

Understand the concept of beta in assessing risk and its role in investment decisions.

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Definitions:

PERT Analysis

Stands for Program Evaluation and Review Technique, a method used in project management to analyze the tasks involved in completing a project, especially the time needed to complete each task.

Beta Distribution

A statistical distribution ranging from 0 to 1, often used in Bayesian analysis and project forecasting, representing a family of probabilities.

Project Management

The discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria within a specified time.

Activity Times

Duration estimates for how long individual tasks within a project or process will take to complete.