Theory Questions
1. Define a CFD contract and explain how it is different from a futures contract.
2. What are the salient product features of CFD?
3. Is short-selling possible with CFDs, and if so are there any advantages?
4. How is the funding cost computed for a CFD contract?
5. What are the margin requirements for a CFD contract?
6. Discuss briefly the advantages and disadvantages of a CFD contract.
7. “CFD is highly risky.” Do you agree? Give reasons for your answer.
8. How is a CFD contract terminated?
9. Explain the trade life cycle for a CFD contract and what journal entries are passed for each event in the cycle.
