Financial Derivatives Quiz Set 1

1. The payoffs for financial derivatives are linked to?

Correct! Wrong!

2. Financial derivatives include?

Correct! Wrong!

3. Financial derivatives include?

Correct! Wrong!

4. Which of the following is not a financial derivative?

Correct! Wrong!

5. By hedging a portfolio, a bank manager?

Correct! Wrong!

6. Which of the following is a reason to hedge a portfolio?

Correct! Wrong!

7. Hedging risk for a long position is accomplished by?

Correct! Wrong!

8. Hedging risk for a short position is accomplished by?

Correct! Wrong!

9. A contract that requires the investor to buy securities on a future date is called a?

Correct! Wrong!

10. A long contract requires that the investor?

Correct! Wrong!

11. A person who agrees to buy an asset at a future date has gone?

Correct! Wrong!

12. A Short contract requires that the investor?

Correct! Wrong!

13. A contract that requires the investor to sell securities on a future date is called a?

Correct! Wrong!

14. If a bank manager chooses to hedge his portfolio of treasury securities by selling futures contracts, he?

Correct! Wrong!

15. To say that the forward market lacks liquidity means that?

Correct! Wrong!

16. A disadvantage of a forward contract is that?

Correct! Wrong!

17. Forward contracts are risky because they?

Correct! Wrong!

18. The advantage of forward contracts over future contracts is that they?

Correct! Wrong!

19. The advantage of forward contracts over futures contracts is that they?

Correct! Wrong!

20. Forward contracts are of limited usefulness to financial institutions because?

Correct! Wrong!

Financial Derivatives Quiz Set 1

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