Name: 
 

2001 Ohio State Grain Merchandising Test



Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 

The current Secretary of Agriculture is from:
a.
Kansas
d.
Texas
b.
California
e.
None of these are correct
c.
Ohio
 

 2. 

The previous Secretary of Agriculture is from:
a.
Kansas
d.
Texas
b.
California
e.
None of these are correct
c.
Ohio
 

 3. 

The current US President is from:
a.
Kansas
d.
Texas
b.
California
e.
None of these are correct
c.
Ohio
 

 4. 

A farmer would go to what agency to participate in US government programs:
a.
FAS
d.
ASCS
b.
FSA
e.
FSA  and Farm Service Agency
c.
Farm Service Agency
 

 5. 

LPD stands for:
a.
loan deficiency payment
b.
leader development program
c.
none of these correct
 

 6. 

A farmer has marketing loan gain when the:
a.
PCP is above the loan rate
b.
When the PCP is below the loan rate
c.
When he can collect a LDP
d.
When the grain is under loan and the PCP is below the loan rate
 

 7. 

A “non-program crop” is:
a.
corn
d.
sunflowers
b.
wheat
e.
soybeans and sunflowers
c.
soybeans
 

 8. 

The current government farm program expire after crop year:
a.
2001
d.
2004
b.
2002
e.
None of these are correct
c.
2003
 

 9. 

The current government farm program is a:
a.
four year program
c.
six year program
b.
Five year program
d.
seven year program
 

 10. 

LDP can be collected on corn, wheat and beans when:
a.
sold
d.
all of these are correct
b.
in the bin
e.
none of these are correct
c.
stored at the elevator
 

 11. 

PCP stands for:
a.
pop corn planted
c.
posted country price
b.
posted corn price
d.
none of these are correct
 

 12. 

There was dock workers this past March and April strike in a port loading soybeans in:
a.
Buenos Aires, Argentina
d.
Paranagua, Brazil
b.
New Orleans, Us
e.
None of these are correct
c.
Vancouver, Canada
 

 13. 

Over the past several years, what disease has been a problem in livestock in Europe:
a.
Foot and Mouth
c.
Mad Cow Disease
b.
Hoof and Mouth
d.
None of these are correct
 

 14. 

What disease has created the most publicity in recent months in Europe?
a.
Foot and Mouth
d.
BST
b.
Mad Cow
e.
None of these are correct
c.
Cholera
 

 15. 

South American countries are currently completing the harvest of:
a.
a very large soybean crop
b.
a poor soybean crop
c.
an average soybean crop
 

 16. 

This past winter there were expectations the 2001 US corn crop acres would reduced due to:
a.
high phosphate costs
c.
high nitrogen cost
b.
high potash costs
d.
high herbicide costs
 

 17. 

Futures contracts of corn, wheat and beans at the CBOT made the most recent contract lows:
a.
July 2000
d.
March 2001
b.
February 2001
e.
None of these are correct
c.
during harvest
 

 18. 

The CBOT was founded in:
a.
1968
d.
1850
b.
1948
e.
None of these are correct
c.
1868
 

 19. 

Quantity wise, the contracts traded at the mid American Exchange are generally:
a.
the same as the CBOT & CME
c.
smaller than the CBOT & CME
b.
larger than the CBOT & CME
d.
none of these are correct
 

 20. 

Corn at the CBOT trade in tricks of:
a.
1 cent
d.
1/8 cent
b.
1/2 cent
e.
None of these are correct
c.
1/4 cent
 

 21. 

Soybean options at the CBOT trade in ticks of:
a.
1 cent
d.
1/8 cent
b.
1/2 cent
e.
None of these are correct
c.
1/4 cent
 

 22. 

A person with a “short” position benefits when the market moves:
a.
higher
d.
expires
b.
sideways
e.
none of these are correct
c.
down
 

 23. 

A person long the market could have a position such as:
a.
grain stored in the bin unpriced
d.
basis contract at the elevator
b.
short a put option
e.
All of these are correct
c.
long a call option
 

 24. 

A spread position would be:
a.
long May corn, short July corn
b.
long a call, short a put
c.
long a call, long a put
d.
long May corn, short July corn AND long a call, short a put
e.
long May corn, short July corn AND long a call, long a put
 

 25. 

Initial margin is the amount of money that is:
a.
paid into a brokerage account to maintain a futures position
b.
paid to a grain elevator to establish a DP contract
c.
paid into a brokerage to open the account
d.
paid into a brokerage account to establish a futures position
e.
none of these are correct
 

 26. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
The 13 cents is the :
a.
strike price
d.
premium
b.
intrinsic value
e.
none of these are correct
c.
time value
 

 27. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
The $ 4.46 is the :
a.
strike price
d.
premium
b.
intrinsic value
e.
none of these are correct
c.
time value
 

 28. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
The $4.60 is the:
a.
strike price
d.
premium
b.
intrinsic value
e.
none of these are correct
c.
time value
 

 29. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
This option has no:
a.
strike price
d.
premium
b.
intrinsic value
e.
none of these are correct
c.
time value
 

 30. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
This option expires in:
a.
July
d.
call options do not expire
b.
June
e.
none of these are correct
c.
August
 

 31. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
If the farmer decides to sell this option before purchasing it, technically speaking, she will be a:
a.
seller
d.
broker
b.
buyer
e.
none of these, she can’t do that!
c.
writer
 

 32. 

A farmer is considering buying or selling a July 20041 $4.60 soybean call priced at 13 cents with July beans trading at $4.46. Use this information to answer this question.
If she takes a short position with this option, she will:
a.
never have to worry about multiple margin calls
b.
will have only limited loss potential
c.
will have unlimited loss potential
d.
none of these are correct
 

 33. 

Grain shrink charts:
a.
are the same at all elevators
b.
regulated by the CFTC
c.
regulated by the USDA
d.
regulated by the Ohio Department of Agriculture
e.
none of these are correct
 

 34. 

If the price a farmer receives for reduced from the elevators posted price, it typically is because of:
a.
drying charges
d.
all of these are correct
b.
excessive moisture
e.
none of these are correct
c.
too much foreign matter
 

 35. 

Any discounts a farmer is charged for quality problems on cash grain will be reported on a:
a.
transactions sheet
d.
all of these are correct
b.
monthly statement
e.
none of these are correct
c.
settlement sheet
 

 36. 

Any discounts a farmer is charged for quality problems on cash grain will be reported on a:
a.
drying charges
d.
all of these are correct
b.
excessive moisture
e.
none are correct
c.
too much foreign sheet
 

 37. 

The test weight for No. 1 corn in pounds per bushel is:
a.
60
b.
58
c.
56
d.
54
e.
52
 

 38. 

The test weight for No.1 wheat in pounds per bushel is:
a.
60
b.
58
c.
56
d.
54
e.
52
 

 39. 

The test weight for No.1 beans in pounds per bushel is:
a.
60
b.
58
c.
56
d.
54
e.
52
 

 40. 

Grain elevators are regulated by the:
a.
CBOT
c.
USDA
b.
State Department of Agriculture
d.
non of these are correct
 

 41. 

The typical soybean crush spread break-even is about cents per bushel:
a.
15
d.
45
b.
25
e.
None of these are correct
c.
35
 

 42. 

The USDA reports export grain inspections:
a.
every Monday
c.
at the end of the month
b.
every Thursday
d.
never
 

 43. 

The USDA issues Supply and Demand Reports on or about:
a.
the last day of every month
b.
the tenth of every month
c.
the last day of the quarter
d.
as it deems necessary to control prices
e.
as directed by the Secretary of Agriculture
 

 44. 

The US grows about how many acres of corn each year?
a.
76 to 80 billion
c.
760 to 800
b.
76 to 80 thousand
d.
76 t 80 million
 

 45. 

The US typically grows:
a.
less acres of beans than corn
c.
same acres of corn & beans
b.
more acres of beans than corn
d.
less bushels of beans than corn
 

 46. 

The US corn marketing year is:
a.
January through December
b.
December through November
c.
September through August
d.
the same as soybeans
e.
September through August and the same as soybeans
 

 47. 

The first new crop wheat futures contract month is:
a.
January
d.
December
b.
July
e.
none of these are correct
c.
November
 

 48. 

The first new crop corn futures contract month is:
a.
January
d.
December
b.
July
e.
none of these are correct
c.
November
 

 49. 

Which of the following are oilseeds?
a.
hi oil corn
d.
all of these are correct
b.
soybeans
e.
soybeans and sunflowers
c.
sunflowers
 

 50. 

Which of the following is not an international grain exporting company?
a.
Cargill
d.
Monfort
b.
Dreyfes
e.
none of these are correct
c.
Bunge
 

 51. 

In the spring, the seasonal trend for corn and soybeans is:
a.
down
b.
sideways
c.
up
d.
there is no such thing as a seasonal trend
e.
none of these are correct
 

 52. 

The corn and bean market frequently makes a major high or major low:
a.
first half of July
d.
December
b.
March
e.
none of these are correct
c.
January
 

 53. 

The average cost of production for a bushel of corn is about:
a.
$1.50
d.
$3.00
b.
$2.00
e.
none of these are correct
c.
$2.50
 

 54. 

The last USDA Pig Crop Report reported the US pig numbers, compared to a year ago, were:
a.
down 2%
d.
up 3.6%
b.
unchanged
e.
none of these are correct
c.
up 2%
 

 55. 

Currently, according to the April USDA Cattle on Feed Report, percentage wise compared to a year ago, there are how many cattle on feed in the US?
a.
down 3%
d.
up 5.6%
b.
unchanged
e.
none of these are correct
c.
up 3%
 

 56. 

A grain buyer’s posted price is a function of:
a.
futures and basis
c.
futures only
b.
basis only
d.
government regulations
 

 57. 

A basis contract can be?
a.
in place before delivery
b.
in place after delivery
c.
there is no such thing
d.
when the government authorizes it
e.
in place before delivery AND in place after delivery
 

 58. 

A forward cash contract:
a.
is in place before the grain is delivered
b.
requires the farmer to have a futures position
c.
is the same as a Hedge to Arrive Contract (HTA)
d.
is illegal
e.
none of these are correct
 

 59. 

When a farmer delivers grain to an elevator and puts the grain on a Delayed Price Contract(DP):
a.
she has turned title of the grain over to the elevator
b.
receives no money at delivery
c.
has futures market risk
d.
has basis market risk
e.
all of these are correct
 

 60. 

If a farmer expects the soybean world market price to go down and the local market to firm, she should use which of the following marketing tools?
a.
basis contract
d.
HTA
b.
forward contract
e.
she should do nothing
c.
DP
 

 61. 

A person who thinks the market price will decline is often referred to as a:
a.
rat
b.
cat
c.
mouse
d.
bull
e.
bear
 

 62. 

The twelve month period ending in March 2001, the NASDAQ market:
a.
declined sharply
b.
rallied sharply
c.
small decline
d.
small increase
 

 63. 

The phrase “coffee shop talk” refers to:
a.
coffee shops that have waitresses that talk too much to farmers, keeping them from their work
b.
coffee shops that have farm market information broadcast on the speaker system
c.
rural area coffee shops that hold grain and livestock marketing seminars in the winter
d.
rural area restaurants where farmers gather and discuss the grain and livestock markets
e.
none of these are correct
 

 64. 

An elevator’s “flat” price for corn is $1.90; new corn is bid at $1.82. Spot corn futures is $2.12; Dec. corn are at $2.25. What is the basis for corn delivered today?
a.
8 cents
c.
-22 cents
e.
-35 cents
b.
-8 cents
d.
+22 cents
 

 65. 

Which of the following are true?
a.
basis is more predictable than the net cash price
b.
basis is more predictable than the futures price
c.
basis is a measure of local supply and demand
d.
basis is determined mathematically: basis= cash price minus futures price
e.
all of these are correct
 

Matching
 
 
Match the following:
a.
if it is a fundamental market factor
b.
if a technical market factor
c.
if it is neither a fundamental or a technical market factor
 

 66. 

open interest at the CBOT
 

 67. 

area of support on daily chart
 

 68. 

number of cattle on feed
 

 69. 

exchange rate of the US Dollar
 

 70. 

number of acres corn planted in Brazil
 

 71. 

Relative Strength Index
 
 
Match the following:
a.
if the answer is Argentina
d.
if the answer is Japan
b.
if the answer is Brazil
e.
if none of these are correct
c.
if the answer in China
 

 72. 

Largest exporter of beans other than the US
 

 73. 

Country with most people in the world
 

 74. 

Largest buyer of US grains
 

 75. 

Had confirmed infection of Foot and Mouth in March 2001
 

 76. 

Will join World Trade Organization in 2001
 

 77. 

Sold corn to South Korea the past two years, costing the US market share of corn sales
 



 
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