2. Tutorial for FX models, futures, options and swaps_students英文版本.pdf

Questions True or false 1. A foreign currency futures contract is a commitment to exchange a specified amount of one currency for another currency at a specified time in the future using the actual spot rate on that future date. 2. A major problem with a currency forward contract is that one party always has an incentive to default when the actual spot rate diverges from the contract price. 3. Exchange-traded currency futures contracts are customized to fit the needs of individual clients. 4. If an investor cannot meet a margin call, the exchange clearinghouse subtracts the amount due from the margin account and closes out the futures contract. 5. In a forward contract, an exchange clearinghouse takes one side of every transaction. 6. Margin requirements on futures contracts are determined by the futures exchange. 7. The majority of forward contracts are settled at maturity. 8. Transactions costs in futures contracts typically take the form of a bid-ask spread. 9. One advantages of currency futures contracts relative to forward contracts is the freedom to liquidate the contract at any time before its maturity 10. In option contracts, one side has the obligation to perform if the other side forces the exchange. In futures contracts, both sides have the obligation to perform. 11. A currency call option is the right to sell the underlying currency at a specified price and within a specified period. 12. A short put on pounds (for dollars) is equivalent to a long call on dollars (for pounds). 13. A foreign currency put option writer has the obligation to sell the underlying currency to the put option holder should the option be exercised. 14. Over-the-counter currency options are standardized to provide added liquidity. 15. There is an active over-the-counter market in currency options operated by large commercial and investment banks.