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What is a derivative instrument?

• a) A financial instrument derived from a physical commodity

• b) A financial contract whose value is derived from an underlying asset

• c) A type of stock traded on the derivatives market

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  d) A government-issued security

Which of the following is not a type of equity derivative?

• a) Options

• b) Futures

• c) Swaps

• d) Stocks

What is the term for the price at which the option holder can buy or sell the underlying asset?

• a) Strike price

• b) Spot price

• c) Market price

• d) Fair value

When would an investor most likely use a call option?

• a) When they expect the price of the underlying asset to decrease

• b) When they expect the price of the underlying asset to increase

• c) When they want to hedge against market volatility

• d) When they are unsure about market direction

What is the delta of an option?

• a) The sensitivity of the option's price to changes in the underlying asset's price

• b) The measure of how much time is left until the option expires

• c) The ratio of the option's price to the price of the underlying asset

• d) The option's volatility

What is the purpose of a "circuit breaker" in the context of derivatives trading?

• a) To prevent market manipulation

• b) To halt trading in the event of a significant price movement

• c) To regulate the number of derivatives contracts a trader can hold

• d) To ensure fair and orderly markets

What is a "black swan event" in the context of derivatives and financial markets?

• a) A rare and unpredictable event with severe consequences

• b) A common event with predictable outcomes

• c) A type of options strategy

• d) A term used to describe positive market trends

What is a "swap" in the context of derivatives?

• a) An agreement to exchange one set of cash flows for another

• b) A short-term option contract

• c) A type of futures contract

• d) A derivative with fixed returns

In the context of options trading, what is a "covered call"?

• a) Writing a call option without owning the underlying asset

• b) Writing a call option while simultaneously owning the underlying asset

• c) Buying a call option without owning the underlying asset

• d) Buying a put option while simultaneously owning the underlying asset

What does a rising open interest along with a rising price suggest?

• A) Bullish market sentiment

• B) Bearish market sentiment

• C) Neutral market sentiment

• D) No correlation between open interest and price movement