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  • D. Variable Annuity Contract

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    This document contains 7 multiple choice questions about derivatives and financial instruments. Question 1 asks about variable annuity contracts not being a derivative instrument. Question 2 asks about trade accounts receivable not being a derivative. Question 3 asks about uncollectibility of accounts receivable not being a risk managed by derivatives. Question 4 defines an underlying as a financial or physical variable that changes in an observable or objectively verifiable way. Question 5 and 6 ask about what can and cannot be an underlying. Question 7 defines a notional amount as something like the number of barrels of oil in a derivatives contract.

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    This document contains 7 multiple choice questions about derivatives and financial instruments. Question 1 asks about variable annuity contracts not being a derivative instrument. Question 2 asks about trade accounts receivable not being a derivative. Question 3 asks about uncollectibility of accounts receivable not being a risk managed by derivatives. Question 4 defines an underlying as a financial or physical variable that changes in an observable or objectively verifiable way. Question 5 and 6 ask about what can and cannot be an underlying. Question 7 defines a notional amount as something like the number of barrels of oil in a derivatives contract.

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    8 views2 pages

    D. Variable Annuity Contract

    Uploaded by

    Spade X
    This document contains 7 multiple choice questions about derivatives and financial instruments. Question 1 asks about variable annuity contracts not being a derivative instrument. Question 2 asks about trade accounts receivable not being a derivative. Question 3 asks about uncollectibility of accounts receivable not being a risk managed by derivatives. Question 4 defines an underlying as a financial or physical variable that changes in an observable or objectively verifiable way. Question 5 and 6 ask about what can and cannot be an underlying. Question 7 defines a notional amount as something like the number of barrels of oil in a derivatives contract.

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    of 2

    1. Which of the following is NOT derivative instruments?

    a. Futures contract
    b. Credit indexed contract
    c. Interest rate swap
    d. Variable annuity contract

    2. Which of the following is NOT a derivative financial instrument?


    a. Option contract
    b. Trade accounts receivable
    c. Foreign currency swap
    d. Outstanding loan commitment written

    3. The basic purpose of derivative instrument is to manage some kind of risk


    such as all of the following, EXCEPT:
    a. Share price movement
    b. Interest rate variation
    c. Currency fluctuation
    d. Uncollectibility of accounts receivable

    4. Any financial or physical variable that has either observable changes or


    objectively verifiable changes qualifies as
    a. Notional amount
    b. Hedge
    c. Financial instrument
    d. underlying

    5. Which of the following is an underlying?


    a. An interest rate index
    b. A security price
    c. An average daily temperature
    d. All of these could be an underlying

    6. Which of the following would NOT qualify as an underlying


    a. Insurance index
    b. Equity shares
    c. Exchange rate
    d. Commodity price

    7. An example of a NOTIONAL is
    a. Number of barrels of oil
    b. Interest rate
    c. Currency rate

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