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LOS a: Define a derivative and differentiate between exchange-traded and over-the-counter derivatives.
Q1. Over-the- counter derivatives:
A) have good liquidity in the over-the-counter (OTC) market.
B) are customized contracts.
C) are backed by the OTC Clearinghouse.
Q2. Which of the following is NOT an over-the-counter (OTC) derivative?
A) A forward contract.
B) A futures contract.
C) A bond option.
Q3. 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.
Q4. A derivative security:
A) has a value based on another security or index.
B) has no default risk.
C) has a value based on stock prices.
Q5. A financial instrument that has payoffs based on the price of an underlying physical or financial asset is a(n):
A) option.
B) derivative security.
C) future.
Q6. A derivative security:
A) is like a callable bond.
B) has a value dependent on the shape of the yield curve.
C) is one that is based on the value of another security.
Q7. Which of the following statements regarding exchange-traded derivatives is FALSE? Exchange-traded derivatives:
A) often trade in a physical location.
B) are illiquid.
C) are standardized contracts.
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发表于 2009-3-2 09:23
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