PUA, MAGDAYAO, AMOREN, BEA UY Photo A

LAVINA, BAHIAN, GUINGGUING Photo B

SANI, MALCOLM, JUMUAD Forwarded Message
VILLAZORDA, DELA CRUZ, ENDERES Attached photo
NAGAC
1. Prices in the cash and futures market tend to move parallel to one another, and when a futures
contract expires, the prices merge into one price. - TRUE.
2. Future trading evolved in 1858 in Chicago, USA where central marketplace was created for
farmers to bring their commodities and sell them either for immediate delivery (spot trading) or for
forward delivery. -FALSE. (1878)

GUINITARAN
1. the party with a long position is the one who agrees to sell the underlying commodity to the buyer
at expiration date and at fixed sales price.False
2. X entered to a future contract to hedge the risk of price increase of an underlying commodity,
therefore X is the buyer. true

ABARQUEZ
1. T - Commodity futures emerged becausefarmers and traders realized that the sale and delivery of
the commodity was not nearly as important as the ability to transfer the price risk associated with
the commodity.
2. F - In futures trade, the over-the-counter (OTC) dealer becomes the counterparty to each
transaction. ANS: not the OTC but the exchange

TEJADA, TILANDUCA, BARAN, RUSIANA

1. The hedgers in a futures contract are the buyers and sellers whereby the said parties create a
contract with each other in order to reduce the risk of price fluctuations. FALSE
2. In order to protect themselves from decrease in prices, the seller of commodities will sell a
contract to the investment firm. This contract will later be sold to the speculators who will bare the
risk transferred by the seller. FALSE
3. Futures markets move more quickly than the cash markets. TRUE
4. Speculators do not only include private investors but also floor traders who do not have any
connection with the cash commodity. FALSE
5. Futures contract are purely paper investment where the term contract is coined mainly because
of the expiration date being similar to any contract. TRUE
6. Manila Consumer Exchange (MCX) is a commodity and derivatives exchange located in Manila,
Philippines. FALSE
7. The margin required to hold futures contract is not only a down payment but is also a form of
security bond which the trader can get back when the market goes with his position. FALSE
8. It would likely be a highly effective hedge if a buyer of wheat, who expects price changes, will
enter into a futures contract with highly correlated market price. TRUE
ABAO

1. The profit and loss of a futures contract depend on the daily movement of the market for that
contract, but are calculated on a monthly basis. FALSE
2. Most transactions in the futures market are settled in cash, and the actual physical commodity is
bought or sold in the cash market. TRUE
PALASAN
1. Unlike the early futures contract which requires guarantee, modern futures requires none of such
payment?FALSE
2. A hedger can never exit in a trade from futures contract before the expiration date?FALSE
CAUDOR
1. the first US futures market was Chicago BOard of TRade. TRUE
2. The Grain FUtures Act was the first effort to regulate the futures market in the US. TRUE
MACADAEG
1. The short holders of a futures contract are the seller of the underlying asset. These holders avail
such contract to reduce the risk against possible price increase. ---FALSE
2. To reduce the risk of higher prices in the future the seller would probably enter a futures contract.
FALSE
CESAR, ASINO, CASINO
1. A speculator engages in derivatives to reduce risk. F
2. Derivatives can be entered by parties not directly related to the underlying financial instrument. T
3. Futures contract evolved from the agricultural sector, in between farmers and dealers of their
commodity. T
4. Hedgers in the futures contract would normally want to increase the value of their assets and
avoid any possible losses. F
5. Two parties are involved in a futures contract: the party in the short position is the buyer and the
party in the long position is the the seller. F
6. The party in the short position is the one who agrees to receive a commodity. F

JOSUE
1. In a short position, you make a profit when the price goes down. TRUE
2. The seller of the futures contract agrees to sell the underlying commodity to the buyer at a fixed
sales price before or at expiration date. FALSE
TAN, GEORGE
1. Futures contracts markets, unlike forward contracts, are generally unregulated by any governing
body, like the government, thus, it is freely traded among individuals. FALSE
2. The functions of futures contracts are price discovery and risk reduction TRUE
TAPING
1. A hedger is a producer of the commodity who engages in futures contract to safeguard himself
from price fluctuations of his good and to ensure an additional profit out of it.--F
2. The underlying asset is the basis in determining the who the buyer and the seller are for futures
contract.---T

PEPITO AND GUITCHE

1. FALSE- the early 20th century was a dark period for derivatives trading where the federal gov
made the first effort to regulate futures market with the grain futures act
2. FALSE- the first exchange for trading derivatives can be traced back in the yodoya rice market in
osaka, japan
3. TRUE- small changes in the price of the underlying commodity results in very large change in the
value of the futures contract.
4. TRUE- futures margin results from a futures contract wherein both parties put down a good faith
money to ensure that the contract will be carried out..
LABITAD
1. By locking-in the price of an underlying asset, a futures contract allows the buyer to transfer his
potential risk and rewards to an investor. TRUE
MAGALLANES
1. When there is upwrd price movemnt,spculator buys now & sell later at a lowr price.F
2. The buyr of a cmmodity is disastrously non-compttive if he/she buys hdging contracts against
prce increases,and the mrket price of cmmodty falls at time of dlivery.T
ANGGOT
1. FALSE: The futures contract provides certainty regarding price volatility for both the long holders
in a futures contract who are trying to secure a high price for the commodity and the short holders
who are trying to secure a low price.
2. FALSE: It was in the eighteenth century that a central marketplace was created where farmers
may bring and sell commodities for immediate or forward delivery, the latter contract being the
forerunner to todays futures contracts.

AGRAVANTE
ang true statements nani hah. kai nalimot ko giunsa toh nako ug rephrase sa akong statements
para mahimung false. Hehehe
1. With a forward contract, the buyer and seller realize gain or loss only on a settlement date. with a
futures contract, the buyer and seller realize gain or loss on a daily basis.
2. The first financial futures contract, foreign currency contracts were introduced on the International
Monetary Market of the Chicago Mercantile Exchange in 1972.
TALON
1. if successful, a profit is made when speculators buys contracts then sells them back at higher
contract price than at which they purchased them. (t)
2. The efficiency of future markets and the accuracy of the supply and demand increase as the
underlying contract gets closer to expiration and more information about what the marketplace
requires at the time of delivery becomes available. (t)
3. The largest difference between OTC derivatives and derivatives traded on a exchange is that with
OTC contracts, there is counterparty risk while exchange derivatives are bot subject to this risk
due to the clearing house acting as intermediary. (t)
OMBINA AND BARLAAN
1. The first futures contracts are generally traced to the Yodoya rice market in Osaka, Japan around
1650. True
2. Trading currency futures in the International Monetary Market created by Chicago Futures
Exchange were the first futures contract that were not in physical commodities. False

3. The speculator is the one who decides if there is a disagreement in the future contract
transaction. False
4. There is always a hedger involved in every futures contract transaction.True
PERATER, CRUZ, GAMIL, EL CARL - lacking
1. Futures are like insurance T
2. In futures, risk is transferred from one party to another T (dili ko sure bsta murag n.ani ang main
idea hehe)
3. At execution of the contract, net position is zero T (dili pd kau ko sure bsta murag n.ani to)

CLAPANO
1. You don't have to hold the futures contract until it expires. You can cancel it anytime you like.
(true)
2. Speculators usually dont have any connection with the cash commodity and simply try to (a)
make a profit by buying a futures contract they expect to fall in price or (b) sell a futures contract
they expect to rise in price. (false)

PANTANOSAS, BALABA, CALAYCAY

1. Futures originally started trading with the farm products including grains, livestock and cattle.
False
2. futures markets have already existed around 150 years ago in the form of central grain markets
that have helped in stabilizing supply and prices of their products. True
3. The buyer's idea is to hedge against market declines and produce consistently positive returns
following the difference of the overall market. False
4. For a buyer to obtain profit from securities price movements, it must actually own the underlying
asset. False
5. A speculator that goes short can generate profits by selling at a lower price ow and repurchase
the contract at a higher price. False
6. A seller of an underlying asset that enters into a futures contract, he/she hopes that the price of
the asset declines. True
IBARRA
1. The position taken by the hedger is opposite the risk he is exposed to. TRUE
2. The position to be taken by a speculator will depend on his forecast of the future economic
condition. If he expects the price to drop, he will take the position of a short-holder. TRUE
QUINLOG
1. The holders of the short position in futures contracts are trying to secure as low a price as
possible. - FALSE.
2. A potato farmer is hedging against lower French fry prices, while a fast food chain hedges against
higher potato prices. The buyer in this statement is the fast food chain. - TRUE

ABAN, PALAMINE, ACANTILADO

1. The first futures contracts are generally to the yodoya rice market in osaka japan and it is known
that the contracts were marked to market daily. FALSE
2. The federal government made its first effort to regulate the futures market with the Grain futures
act. TRUE
3. The delivery of the underlying asset in a futures contract always signifies its maturity. FALSE
4. Futures Contract is more often used for Speculating than for hedging purposes. TRUE
5. Even if the underlying instrument shall be bought or sold at a specific time in the future, the value
of such operation is marked to market rate daily with daily settlements of the profits earned.
FALSE
6. Only the buyer is required to make an initial guarantee, while the seller may do so at his
option. FALSE
MOLOK
1. The futures market originated to resolve the inequality between the demand and supply of
agricultural crops resulting to either an excess or shortage of a given commodity. (TRUE)
2. Electronic trading on certain contracts during off-exchange hours already existed by the year
1982. (FALSE)
BLANCAFLOR
1. the position taken by a hedger is always opposite to the risk he is exposed, thus it is called a
naked position - FALSE
2. a hedger uses derivative market not only to reduce risk caused bu movement in prices but also
has the primary objective of making profits - FALSE

CO
1. False. Long holders of a futures contract will want to secure a high price for a commodity to be
able to sell it at a profitabke pricd on a future date.
2. False. A miner makes a lucrative decision by entering into a futures contract if he anticipates the
price of gold to rise.

GARCES
1. "a forward agreement are generally customized to the needs of the counterparties and sold
through
over-the-counter
(OTC)
dealers,
futures
contracts
are
standardized
agreements traded on organized cxchanges." gi False nako
BUTIL
1. Futures contracts were the forerunners to today's forward contracts. In fact, this concept saved
many farmers from the loss of crops and profits. - T
2. A dealer would agree to buy 5,000 bushels of specified quality of wheat from the farmer in June
the following year, for a specified price. The farmer knew how much he would be paid in advance,
and the dealer knew his costs. This is a futures contract. - T

3. Hedging is a means to lock an acceptable price margin between cost and retail cost of the final
product. - T
i. murag naa mi gifalse ana sa final paper.

CAHATIAN
1. The most significant as far as the history of U. S. futures markets, was the creation of the
Chicago Mercantile Exchange in 1848 located at Lake Michigan, Chicago.False
2. The first "futures" contracts are ge.nerally traced to the Yodoya rice market in Osaka, Japan
around 1650. True

CLAVECILLA and DAHILAN

1. All people who trade futures contracts are not speculators TRUE
2. Speculators use the future markets to avoid risk, protecting themselves against price changes
FALSE
3. Hedgers accept risk in the futures markets, trying to profit from price changes FALSE
4. In futures, it is incorrect to say that when the price of the underlying asset decreases, the
speculator gains profit and the trader absorbs the loss TRUE
5. In futures, the only way for a speculator to gain profit is by selling a contract and
buying it back at a much lower price - FALSE

GO
1. The more volatile the market prices are, the more traders make money from futures contract.
Thus, if prices are stable, less profit is made. TRUE
2. A derivative provider always wishes the prices to decrease on the specified date of the futures
contract. A speculator ALWAYS bets the prices to increase on that date. FALSE (sometimes)
3. One of the very first futures markets is the Chicago Board of Trade in 1948. FALSE (1848)
4. In, 1982, the CHICAGO Board of Trade launched the first stock index futures, a contract on the
Value Line Index. FALSE (Kansas)
5. In 1955 the Supreme Court rues in the case of Corn Products Refining Company that profits from
hedging are treated as ordinary income. TRUE

6. In 1972 the Chicago Mercantile Exchange, responding to the now-freely floating international
currencies, created the International Monetary market, which allowed trading in currency futures.
These were the first futures contracts that were not on physical commodities. TRUE

YANOYAN
1. Forward contract and futures contract are quoted and traded on an exchange. - False
2. Commodities such as oil, gold, silver, etc. are traded only in the futures market and not in forward
markets. True
BAYUCOT
1. In an open outrcy trading, U.S. brokers no longer use computers since these are only used in
electronic trading. FALSE
2. Price Limit, which is also known as Limit Up, is the maximum amount by which the price of a
futures contract may advance in one trading day. FALSE