The chapters in this document are displayed in reversed order, with the last chapter appearing first.
This change ensures all chapters are included in the test bank. Chap 1 to 15 included ✅
Fundamentals of Investing, 2Ce (Smart)
Chapter 15 Futures Markets and Securities
15.1 Learning Objective 1
1) All futures contracts trade continuously between 7:30 a.m. and 2:00 p.m., Monday through Friday.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
2) Futures contracts for various commodities have different trading hours depending on the commodity.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
3) The definition of commodity is broad enough to include things like foreign currencies and the future
value of stock market indexes.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
4) Futures trading requires large amounts of capital because the buyer of a contract must deposit the full
seUlement price of the contract at the time of purchase.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
5) Futures contracts obligate a participant to buy or sell the commodity at the contracted price unless the
contract is cancelled or liquidated before the expiration date.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
1
Copyright © 2026 .
,6) Commodity prices react to a unique set of economic, political and international pressures, as well as to
the weather.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
7) Because a futures contract deals with very large trading units, even a modest price change in the price
of the underlying commodity can have a large impact on the market value of the contract.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
8) With a futures contract, an investor cannot lose more than the price of the contract itself.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
9) The number of commodities traded in futures markets has been decreasing because of tighter
regulations and a narrower definition of commodity.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
10) The seller of a futures contract
A) has the option of canceling the contract the following day if the price is not acceptable to him/her.
B) is legally bound to make delivery of the specified item on the specified day.
C) receives the entire contract amount at the time the contract is made.
D) must make delivery before receiving any monies on the contract.
Answer: B
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
2
Copyright © 2026 .
,11) Which of the following features are shared by futures contracts and options?
I. They have specified expiration dates.
II. Their value is derived from changes in the value of some other asset.
III. Unprofitable futures or options can simply be allowed to expire unexercised.
IV. They obligate the buyer and seller to exchange cash for the underlying asset on the expiration date.
A) I and II only
B) I and IV only
C) II and III only
D) I, II and III only
Answer: A
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
12) A major Canadian commodities exchanges is
A) The Winnipeg Exchange.
B) The Vancouver Exchange.
C) The ICE Futures Canada.
D) The Toronto Stock Exchange.
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
13) The amount paid at the time a futures contract is sold
A) represents the maximum loss for the buyer of the contract.
B) represents the maximum profit for the buyer of the contract.
C) is the initial margin deposit.
D) is the total value of the goods being traded in the future.
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
3
Copyright © 2026 .
, 14) With futures contracts, the price at which the commodity must be delivered
A) is set when the futures contract is sold.
B) is set when the contract expires.
C) is equivalent to the strike price for an options contract.
D) changes frequently during the life of the contract.
Answer: A
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
15) Which of the following characteristics apply to futures contracts?
I. Futures contracts are an important tool to control risk.
II. Futures contracts are highly risky and involve speculation.
III. Futures contracts specify both the quantity and the quality of the item.
IV. The buyer must hold the contract until maturity.
A) I and II only
B) II and IV only
C) I, II and III only
D) I, II, III and IV
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
16) Which of the following are specifically stated in futures contracts?
I. the quantity of the commodity to be delivered
II. the quality of the commodity to be delivered
III. the exact price at which the commodity must be delivered
V. the time and place at which the commodity must be delivered
A) I and II only
B) II and IV only
C) I, II and III only
D) I, II, III and IV
Answer: D
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
4
Copyright © 2026 .
This change ensures all chapters are included in the test bank. Chap 1 to 15 included ✅
Fundamentals of Investing, 2Ce (Smart)
Chapter 15 Futures Markets and Securities
15.1 Learning Objective 1
1) All futures contracts trade continuously between 7:30 a.m. and 2:00 p.m., Monday through Friday.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
2) Futures contracts for various commodities have different trading hours depending on the commodity.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
3) The definition of commodity is broad enough to include things like foreign currencies and the future
value of stock market indexes.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
4) Futures trading requires large amounts of capital because the buyer of a contract must deposit the full
seUlement price of the contract at the time of purchase.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
5) Futures contracts obligate a participant to buy or sell the commodity at the contracted price unless the
contract is cancelled or liquidated before the expiration date.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
1
Copyright © 2026 .
,6) Commodity prices react to a unique set of economic, political and international pressures, as well as to
the weather.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
7) Because a futures contract deals with very large trading units, even a modest price change in the price
of the underlying commodity can have a large impact on the market value of the contract.
Answer: TRUE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
8) With a futures contract, an investor cannot lose more than the price of the contract itself.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
9) The number of commodities traded in futures markets has been decreasing because of tighter
regulations and a narrower definition of commodity.
Answer: FALSE
Type: TF
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
10) The seller of a futures contract
A) has the option of canceling the contract the following day if the price is not acceptable to him/her.
B) is legally bound to make delivery of the specified item on the specified day.
C) receives the entire contract amount at the time the contract is made.
D) must make delivery before receiving any monies on the contract.
Answer: B
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
2
Copyright © 2026 .
,11) Which of the following features are shared by futures contracts and options?
I. They have specified expiration dates.
II. Their value is derived from changes in the value of some other asset.
III. Unprofitable futures or options can simply be allowed to expire unexercised.
IV. They obligate the buyer and seller to exchange cash for the underlying asset on the expiration date.
A) I and II only
B) I and IV only
C) II and III only
D) I, II and III only
Answer: A
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
12) A major Canadian commodities exchanges is
A) The Winnipeg Exchange.
B) The Vancouver Exchange.
C) The ICE Futures Canada.
D) The Toronto Stock Exchange.
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
13) The amount paid at the time a futures contract is sold
A) represents the maximum loss for the buyer of the contract.
B) represents the maximum profit for the buyer of the contract.
C) is the initial margin deposit.
D) is the total value of the goods being traded in the future.
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
3
Copyright © 2026 .
, 14) With futures contracts, the price at which the commodity must be delivered
A) is set when the futures contract is sold.
B) is set when the contract expires.
C) is equivalent to the strike price for an options contract.
D) changes frequently during the life of the contract.
Answer: A
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
15) Which of the following characteristics apply to futures contracts?
I. Futures contracts are an important tool to control risk.
II. Futures contracts are highly risky and involve speculation.
III. Futures contracts specify both the quantity and the quality of the item.
IV. The buyer must hold the contract until maturity.
A) I and II only
B) II and IV only
C) I, II and III only
D) I, II, III and IV
Answer: C
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
16) Which of the following are specifically stated in futures contracts?
I. the quantity of the commodity to be delivered
II. the quality of the commodity to be delivered
III. the exact price at which the commodity must be delivered
V. the time and place at which the commodity must be delivered
A) I and II only
B) II and IV only
C) I, II and III only
D) I, II, III and IV
Answer: D
Type: MC
Learning Objective: 15.1 Describe the essential features of a futures contract, and explain how the
futures market operates.
AACSB: Application of knowledge
4
Copyright © 2026 .
