Financial Derivatives Quiz Set 6

1) If a bank has more rate-sensitive assets than rate-sensitive liabilities?

Correct! Wrong!

2) If Second National Bank has more rate-sensitive liabilities then rate-sensitive assets, it can reduce interest rate risk with a swap that requires Second National to?

Correct! Wrong!

3) One advantage of using swaps to eliminate interest rate risk is that swaps?

Correct! Wrong!

4) An advantage of using swaps to hedge interest rate risk is that swaps?

Correct! Wrong!

5) The disadvantage of swaps is that they?

Correct! Wrong!

6) A disadvantage of using swaps to control interest rate risk is that?

Correct! Wrong!

7) The problems of default risk and finding counterparties for interest rate swaps has been reduced by?

Correct! Wrong!

8)_______risk is a loss may occur from the failure of another party to perform according to the terms of a contract?

Correct! Wrong!

9) Financial derivatives include?

Correct! Wrong!

10) By hedging a portfolio; a Bank manager?

Correct! Wrong!

11) A long contract requires that the investor?

Correct! Wrong!

12) The disadvantage of swaps is that they?

Correct! Wrong!

13) Hedging by buying an option?

Correct! Wrong!

14) All other things held constant premium on options will increase when the?

Correct! Wrong!

15) An option allowing the owner to sell an asset at a future date is a_____?

Correct! Wrong!

16) Composite value of traded stocks group of secondary market is classified as?

Correct! Wrong!

17) _____is the minimum amount which must be remained in a margin account?

Correct! Wrong!

18) The number of future contract outstanding is called______?

Correct! Wrong!

19) The amount paid for an option is the?

Correct! Wrong!

20) Futures contracts are more successful than interest rate forward contracts because they?

Correct! Wrong!

Financial Derivatives Quiz Set 6

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