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* An increase in which of the following would increase the price of a call option on common stock, ceteris paribus?

1. Stock Price

2. Stock Price Volatility

3. Interest Rates

4. Exercise Price

1. II only

2. II and IV only

3. I, II and III only

4. I, III and IV only

5. I, II, III and IV

* Which of the following is true?

1. Forward contracts have no default risk

2. Future contracts require an initial margin requirement to be paid

3. Forward contracts are marked to market daily

4. Forward contract buyers and sellers do not know who the counterparty is

5. Future contracts are only traded over the counter

* You have agreed to deliver the underlying commodity in 90 days. Today the underlying commodity price rises and you get a margin call. You must have:

1. A long position in a future contract

2. A short position in a future contract

3. Sold a forward contract

4. Purchased a forward contract

5. Purchased a call option on a future contract

* You find the following current quote for the June T-Bond contract: $100,000; Pts 32nd, of 100%.

Open High Low Settle Open Interest

89-16 89-16 88-22 88-28 45,348

You went long in the contract at the open. Which of the following is/are true?

1. By the end of the day your margin account would be increased

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