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Published by indapants

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Published by: indapants on Aug 23, 2012
Copyright:Attribution Non-commercial


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1.The market value of the derivatives contracts worldwide totalsa.less than a trillion dollars b.in the hundreds of trillion dollarsc.over a trillion dollars but less than a hundred trilliond.over quadrillion dollarse.none of the above2.Cash markets are also known asa.speculative markets b.spot marketsc.derivative marketsd.dollar marketse.none of the above3.A call option gives the holdea.the right to buy something b.the right to sell somethingc.the obligation to buy somethingd.the obligation to sell somethinge.none of the above4.Which of the following instruments are contracts but are not securitiesa.stocksb.optionsc.swapsd.a and be.b and c5.The positive relationship between risk and return is calleda.expected return b.market efficiencyc.the law of one priced.arbitragee.none of the above6.A transaction in which an investor holds a position in the spot market and sells a futures contract or writes a call isa.a gamble b.a speculative positionc.a hedged.a risk-free transactione.none of the above7.Which of the following are advantages of derivatives?a.lower transaction costs than securities and commodities b.reveal information about expected prices and volatilityc.help control risd.make spot prices stay closer to their true valuese.all of the above8.A forward contract has which of the following characteristics?a.has a buyer and a selle b.trades on an organized exchangec.has a daily settlementd.gives the right but not the obligation to buye.all of the above9.Options on futures are also known asa.spot options b.commodity optionsc.exchange optionsd.security optionse.none of the above10.A market in which the price equals the true economic valuea.is risk-free b.has high expected returnsc.is organizedd.is efficiente.all of the above11.Which of the following trade on organized exchanges?a.capsb.forwards c.options d. swaps e.none of the above

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