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Wiley FINRA Series 3 Exam Review 2017. The National Commodities Futures Examination

  • ID: 4052935
  • Book
  • May 2017
  • 224 Pages
  • John Wiley and Sons Ltd
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The go–to guide to acing the Series 3 Exam!

Created by the experts at The Securities Institute of America, Inc., Wiley Series 3 Exam Review 2017 arms you with what you need to score high on the test and pass the Series 3 Exam. Designed to let you build and fine–tune your knowledge of all areas covered and guarantee that you're prepared mentally and strategically to take the test, it provides:

- Hundreds of examples
- Assorted practice questions for each subject area covered in the exam
- Priceless test–taking tips and strategies
- Helpful hints on how to study for the test, manage stress, and stay focused

The National Commodities Futures Examination (Series 3) is an entry–level exam that qualifies individuals for registration to transact business in commodity futures and options on futures. This intense two and a half hour test is the must–pass exam for aspiring financial professionals. The exam consists of 120 questions about everything from future trading theory, futures margins, option premiums, basic hedging, spreading, speculation, and the rules and regulations of the CFTC/NFA.

Wiley Series 3 Exam Review 2017 is your ticket to passing the test with flying colors on the first try and becoming a registered Commodity Futures Representative.

Visit [external URL] for more information.

The Securities Institute of America, Inc. helps thousands of securities and insurance professionals build successful careers in the financial services industry every year. Our securities training options include:

- Onsite classes
- Private tutoring
- Classroom training
- Interactive online video training classes
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As a result, you can choose a securities training solution that matches your skill level, learning style, and schedule. Regardless of the format you choose, you can be sure that our securities training courses are relevant, tested, and designed to help you succeed. It is the experience of our instructors and the quality of our materials that make our courses requested by name at some of the largest financial services firms in the world.

To contact The Securities Institute of America, visit us on the web at [external URL] or call 877–218–1776.
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About the Series 3 Exam xi

About This Book xv

About the Test Bank xvii

About the Securities Institute of America xix

Chapter 1 Futures and Forwards 1

The Spot Market 1

Forward Contracts 2

Futures 3

Trading Futures on the Floor of the Exchange 4

Clearinghouse 5

Clearing Member Margin Calculations 7

Basis Grade 8

Pretest 11

Chapter 2 Trading Commodity Futures 15

Types of Orders 15

Market Orders 16

Buy Limit Orders 16

Sell Limit Orders 16

Stop Orders/Stop Loss Orders 17

Buy Stop Orders 18

Sell Stop Orders 18

Stop Limit Orders 19

Other Types of Orders 19

Pretest 29

Chapter 3 Futures Pricing 31

Contract Sizes and Pricing 31

U.S. Treasury Futures 35

Stock Index Futures 36

Index Future Settlement 37

Single Stock Futures 37

Foreign Currency Futures 39

Pretest 41

Chapter 4 Price Forecasting 45

Futures Market Pricing Structure 45

Agricultural Futures Pricing 48

Supply and Demand Elasticity 49

Government Agricultural Programs 49

Crop Year 50

Economic Policy 50

Tools of the Federal Reserve Board 51

Interest Rates 51

Reserve Requirement 52

Changing the Discount Rate 53

Federal Open Market Committee 53

Money Supply 53

Disintermediation 54

Moral Suasion 54

Fiscal Policy 55

International Monetary Considerations 56

London Interbank Offered Rate / LIBOR 57

Yield Curve Analysis 57

Technical Analysis 59

Pretest 65

Chapter 5 Speculation and Hedging 69

Speculation 69

Margin 72

Maintenance Margin 74

Changes to the Margin Requirement 78

Other Forms of Margin Deposits 79

Hedging 81

How to Manage an Imperfect Hedge 84

A Change in Basis Price 85

Hedging Financial Risks 88

Pretest 97

Chapter 6 Commodity Futures Options and Commodity Futures Spreads 101

Option Classification 101

Option Classes 102

Option Series 102

Bullish vs. Bearish 102

Possible Outcomes for an Option 103

Managing an Option Position 104

Buying Calls 104

Selling Calls 106

Buying Puts 108

Selling Puts 109

Option Premiums 111

Intrinsic Value and Time Value 113

Multiple Option Positions and Strategies 114

Long Straddles 114

Short Straddles 117

Spreads 120

Analyzing Spreads/Price Spreads 121

Bull Call Spreads/Debit Call Spreads 121

Spread Premiums Bull Call Spread 123

Bear Call Spreads/Credit Call Spreads 124

Spread Premiums Bear Call Spread 126

Bear Put Spreads/Debit Put Spreads 127

Spread Premiums Bear Put Spread 128

Bull Put Spreads/Credit Put Spreads 129

Spread Premiums Bull Put Spread 130

Synthetic Risk and Reward 131

Delta 133

Spreading Futures Contracts 133

Spreading Treasury Futures 136

Pretest 137

Chapter 7 CFTC & NFA and Regulations 141

The Commodity Exchange Act of 1936 141

Futures Commission Merchant 143

Introducing Broker 144

Commodity Pool Operator 144

Commodity Trading Adviser 146

Risk Disclosure Documents 146

Additional Disclosures by CTAs and CPOs 152

Customer Accounts 153

Arbitration 158

The CFTC Reparation Process 159

Written Communication with the Public 164

Pretest 169

Answer Keys 173

Glossary of Exam Terms 181

Index 195

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