Financial Derivatives Quiz Set 3

Practice Quiz Online and See Your Result in the Last.

1. If you sold a short futures contract you will hope that bond prices?

Correct! Wrong!

2. To hedge the interest rate risk on Rs. 4 million of Treasury bonds with Rs. 100,000 futures contracts, you would need to purchase?

Correct! Wrong!

3. If you sell twenty-five Rs. 100,000 futures contracts to hedge holdings of a Treasury security, the value of the Treasury securities you are holding is?

Correct! Wrong!

4. Assume you are holding Treasury securities and have sold futures to hedge against interest rate risk. If interest rates rise?

Correct! Wrong!

5. Assume you are holding Treasury securities and have sold futures to hedge against interest rate risk. If interest rates fall?

Correct! Wrong!

6. When a financial institution hedges the interest-rate risk for a specific asset, the hedge is called a?

Correct! Wrong!

7. When the financial institution is hedging interest-rate risk on its overall portfolio, then the hedge is a?

Correct! Wrong!

8. The number of futures contracts outstanding is called?

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9. Which of the following features of futures contracts were not designed to increase liquidity?

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10. Which of the following features of futures contracts were not designed to increase liquidity?

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11. Futures differ from forwards because they are?

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12. Futures differ from forwards because they are?

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13. The advantage of futures contracts relative to forward contracts is that futures contracts?

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14. If a firm is due to be paid in deutsche marks in two months, to hedge against exchange rate risk the firm should?

Correct! Wrong!

15. If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by?

Correct! Wrong!

16. If a firm is due to be paid in deutsche marks in two months, to hedge against exchange rate risk the firm should _____ foreign exchange futures _____?

Correct! Wrong!

17. If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by _____ foreign exchange futures _____?

Correct! Wrong!

18. Options are contracts that give the purchasers the?

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19. The price specified on an option that the holder can buy or sell the underlying asset is called the?

Correct! Wrong!

20. The price specified on an option that the holder can buy or sell the underlying asset is called the?

Correct! Wrong!

Financial Derivatives Quiz Set 3

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