4.In a forward contract,the party who commits to sell an item is said to take a,and the party who commits to buy the specified item is said to take a (a)long position;short position (b)short position,spot position (c)short position;long position (d)long position;spot position Answer:(c) 5. are traded on organized exchanges. (a)Forward contracts (b)Futures contracts (c)Options (d)b and c Answer:(d) 6.A(n) is an agreement between two parties to exchange a series of cash flows at specified intervals over a specified period of time. (a)futures contract (b)swap contract (c)option contract (d)credit contract Answer:(b) 7.The swap contract is equivalent to (a)a series of forward contracts (b)a series of credit contracts (c)a series of option contracts (d)a series of diversification contracts Answer:(a) 8.For a savings bank with customer liabilities that are short-term deposits earning an interest rate that changes with market conditions,one appropriate hedging strategy might be to roll over short-term bonds.This is termed (a)a swaps contract (b)an options contract (c)matching assets to liabilities (d)an insurance contract Answer:(c) 11-211-2 4. In a forward contract, the party who commits to sell an item is said to take a ________, and the party who commits to buy the specified item is said to take a ________. (a) long position; short position (b) short position, spot position (c) short position; long position (d) long position; spot position Answer: (c) 5. ________ are traded on organized exchanges. (a) Forward contracts (b) Futures contracts (c) Options (d) b and c Answer: (d) 6. A(n) ________ is an agreement between two parties to exchange a series of cash flows at specified intervals over a specified period of time. (a) futures contract (b) swap contract (c) option contract (d) credit contract Answer: (b) 7. The swap contract is equivalent to ________. (a) a series of forward contracts (b) a series of credit contracts (c) a series of option contracts (d) a series of diversification contracts Answer: (a) 8. For a savings bank with customer liabilities that are short-term deposits earning an interest rate that changes with market conditions, one appropriate hedging strategy might be to roll over short-term bonds. This is termed ________. (a) a swaps contract (b) an options contract (c) matching assets to liabilities (d) an insurance contract Answer: (c)