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Test Bank For Fundamentals of Futures and Options Markets 9 th
Global Edition By John C.Hull (All Chapters 1-24, 100% Original Verified, A+ Grade) All Chapters Arranged
Reverse: 24-1
This is The Original Test Bank For 9 th Global Edition, All other Files in The Market are Fake/Old/Wrong. 1 / 4
Hull: Fundamentals of Futures and Options Markets, Ninth Edition, Global Edition
Chapter 24: Weather, Energy, and Insurance Derivatives
Multiple Choice Test Bank 1.On a certain day the highest temperature is 77 degrees and the lowest temperature is 61 degrees. What is the day’s HDD?A.5 B.12 C.4 D.0
Answer: D
2.On a certain day the highest temperature is 77 degrees and the lowest temperature is 61 degrees. What is the day’s CDD?A.5 B.12 C.4 D.0
Answer: C
3.Which of the following are products refined from crude oil?A.Heating oil B.Gasoline C.Kerosene D.All of the above
Answer: D
4.Which of the following typically has the highest volatility?A.Crude oil B.Natural gas C.Electricity D.Sometimes crude oil and sometimes natural gas
Answer: C
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5.Which of the following typically has the lowest volatility?A.Crude oil B.Natural gas C.Electricity in the winter D.Electricity in the summer
Answer: A
6.Which of the following describes a typical reinsurance contract?A.Covers a percentage of all losses by an insurance company B.Covers all losses of the insurance company up to a certain amount C.Covers all losses of the insurance company above a certain amount D.Covers all losses of the insurance company between two amounts
Answer: D
7.Which of the following describes a CAT bond?A.Has a great deal of systematic risk B.Has very little systematic risk C.Has a moderate amount of systematic risk D.Has negative systematic risk
Answer: B
8.Which of the following is a common use of weather derivatives?A.Hedge the volume of electricity that will be demanded by customers in the summer B.Hedge the price of oil that must be purchased in the winter C.Hedge the price of electricity that must be purchased in the summer D.Hedge the price and volume of gas that must be purchased for heating in the winter
Answer: A
9.Which of the following describes the period during which a “5 times 8” contract provides electricity?A.From 11pm to 7am on five successive days B.From 8am to 4pm on five successive days C.For any 5 hours of a day on 8 successive days D.For any 8 hours of a day in five successive days
Answer: A
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10.Which of the following describes the period during which a “5 times 16” contract provides electricity?A.From 7am to 11pm on five successive days B.From 4pm to 8am on five successive days C.For any 5 hours of a day on 16 successive days D.For any 16 hours of a day in five successive days
Answer: A
11.Which of the following is NOT true about electricity?A.Supply and demand for electricity are matched within 140 control areas in the US, then excess power sold to other control areas B.The ability to sell excess power is constrained by transmission capacity C.Electricity is a commodity that can be easily stored D.Air conditioning is a big use of electricity
Answer: C
12.Where are oil, gas, and electricity derivatives traded?A.On exchanges and the OTC market B.On exchanges, but not on the OTC market C.On the OTC market , but not on exchanges D.Oil is traded in both markets, but the other two are traded only in the OTC market
Answer: A
13.Which of the following is NOT seasonal?A.Spot electricity B.Spot natural gas C.Electricity futures prices D.Spot price of corn
Answer: C
14.How can an energy producer hedge its risks?A.Use weather derivatives for price risk and energy derivatives for volume risk Copyright © 2023 Pearson Education Ltd. All rights reserved.
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