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LOS d: Evaluate credit risk in a forward contract, and explain how market value is a measure of the credit risk to a party in a forward contract.
Q1. The best measure of the amount of credit risk exposure for a forward contract, at a point in time, is the:
A) liabilities of the counterparty.
B) value of the contract.
C) notional amount of the contract.
A) directly related to the contract value.
B) positively related to the term of the contract.
C) only an issue for the long.
Q3. Over the life of a forward contract, the amount of credit risk is least likely to:
A) stay the same.
B) change signs.
C) increase.
Q4. Credit risk to the long (position) in a forward contract will increase over the life of the contract due to all of the following EXCEPT the:
A) short party has deteriorating finances.
B) contract value to the short is negative and decreasing.
C) settlement date is getting closer. | 
发表于 2009-3-27 16:33
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