WorksheetsFinancial Derivatives
Total questions: 10
Worksheet time: 10mins
The buyer of a forward contract:
will be taking delivery of the good(s) today at today's price.
will be making delivery of the good(s) at a later date at that date's price.
will be making delivery of the good(s) today at today's price.
will be taking delivery of the good(s) at a later date at pre-specified price.
A _____ is a derivative security that gives the owner the right, but not the obligation, to buy an asset at a fixed price for a specified period of time.
futures contract
call option
put option
swap
The main difference between a forward contract and a cash transaction is:
only the cash transaction creates an obligation to perform.
a forward is performed at a later date while the cash transaction is performed immediately.
only one involves a deliverable instrument.
neither allows for hedging.
A trading opportunity that offers a riskless profit is called a(n):
put option.
call option.
market equilibrium.
arbitrage.
A potential disadvantage of forward contracts versus futures contracts is:
the extra liquidity required to cover the potential outflows that occur prior to delivery and caused by marking to market.
the incentive for a particular party to default.
that the buyers and sellers don't know each other and never meet
All of the above.
A financial contract that gives its owner the right, but not the obligation, to buy or sell a specified asset at an agreed-upon price on or before a given future date is called a(n) _____ contract.
option
future
forward
swap
The act where an owner of an option buys or sells the underlying asset, as is his right, is called ______ the option.
striking
exercising
opening
splitting
The fixed price in an option contract at which the owner can buy or sell the underlying asset is called the option's:
opening price.
intrinsic value.
strike price.
market price.
The last day on which an owner of an option can elect to exercise is the _____ date.
ex-payment
ex-option
opening
expiration
who played in 2018 FIFA World Cup final?
Germany vs Argentina
France vs Italy
Spain vs Netherland
France vs Croatia
