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WorksheetsRisk Management - Quiz#3
Total questions: 15
Worksheet time: 30mins
It refers to a marketplace where buyers and sellers participate in the trade.
(a)
Which is NOT a function of the financial market?
mobilization of fund
saves time and energy
risk sharing
It is the meeting point of buyers and sellers of stocks.
debt market
equity market
financial market
It is also known as systematic risk.
(a)
High risk means _____.
(choose two answers)
big potential loss
big potential reward
big potential risk
It is the risk to income or capital arising from fluctuating interest rates.
interest rate risk
interest income risk
interest capital risk
A risk factor that tells about the overall rises in prices of goods and services that will undermine the value of money.
commodity risk
inflation risk
interest rate risk
Derivatives are instruments used to manage financial risks.
maybe
true
false
A derivative instrument that suggests a contract between two traders for purchase and delivery of assets at a specific time and future date but is not traded on stock exchange.
swaps
futures
forwards
It is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors.
net interest income
net compounding interest
net simple interest
Pedro borrowed 10,000 with a 2% annual interest rate. Compute for the simple interest rate.
(a)
It essentially means “interest on interest.”
(a)
What is the importance of interest rate risk in banks? (Answer in 1 sentence)
What do you mean by OTC?
(a)
Can we control the market risk?
(a)
