Reading 67: Derivative Markets and Instruments LOS a习题

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发表于 2010-4-26 11:28 | 只看该作者

Over-the- counter derivatives:

A)	have good liquidity in the over-the-counter (OTC) market.

B)	are backed by the OTC Clearinghouse.

C)	are customized contracts.

OTC derivative contracts (securities) are customized and have poor liquidity. The contract is with a specific counterparty and there is default risk since there is no clearinghouse to guarantee performance.

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Which of the following is NOT an over-the-counter (OTC) derivative?

A)	A forward contract.

B)	A futures contract.

C)	A bond option.

Futures contracts are exchange-traded; forwards and most bond options are OTC derivatives.

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Which of the following definitions involving derivatives is least accurate?

A)	A call option gives the owner the right to sell the underlying good at a specific price for a specified time period.

B)	An option writer is the seller of an option.

C)	An arbitrage opportunity is the chance to make a riskless profit with no investment.

A call option gives the owner the right to buy the underlying good at a specific price for a specified time period.

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Which of the following is most likely an exchange-traded derivative?

A)	Bond option.

B)	Equity index futures contract.

C)	Currency forward contract.

Futures are exchange-traded derivatives. Forward contracts and swaps are over-the-counter derivatives. Bond options are traded almost entirely in the over-the-counter market.

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发表于 2010-4-26 11:29 | 只看该作者

Which of the following is most likely an exchange-traded derivative?

A)	Bond option.

B)	Equity index futures contract.

C)	Currency forward contract.

Futures are exchange-traded derivatives. Forward contracts and swaps are over-the-counter derivatives. Bond options are traded almost entirely in the over-the-counter market.

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A financial instrument that has payoffs based on the price of an underlying physical or financial asset is a(n):

option.

future.

C)	derivative security.

Options and futures are examples of types of derivative securities.

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A derivative security:

A)	is like a callable bond.

B)	is one that is based on the value of another security.

C)	has a value dependent on the shape of the yield curve.

A derivative security is one that ‘derives’ its value from that of another security.

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发表于 2010-4-26 11:29 | 只看该作者

Which of the following statements regarding exchange-traded derivatives is FALSE? Exchange-traded derivatives:

A)	often trade in a physical location.

B)	are standardized contracts.

C)	are illiquid.

Derivatives that trade on exchanges have good liquidity in most cases. They have the other characteristics listed.