Question 1

A 5×8 contract provides electricity: choose one)

Accepted Answer

A)  From 11:00pm to 7:00am on five successive days 
B)  From 8:00am to 4:00pm on five successive days 
C)  For any 5 hours of a day on eight successive days 
D)  For any 8 hours of a day in five successive days 
A)  From 11:00pm to 7:00am on five successive days 
B)  From 8:00am to 4:00pm on five successive days 
C)  For any 5 hours of a day on eight successive days 
D)  For any 8 hours of a day in five successive days A

Question 2

Which of the following typically has the lowest volatility? choose one)

Accepted Answer

A)  Crude oil 
B)  Natural gas 
C)  Electricity 
A)  Crude oil 
B)  Natural gas 
C)  Electricity A

Question 3

A typical reinsurance contract: choose one)

Accepted Answer

A)  Covers a percentage of all losses by an insurance company 
B)  Covers all losses of the insurance company up to a certain amount 
C)  Covers all losses of the insurance company above a certain amount 
D)  Covers all losses of the insurance company between two amounts 
A)  Covers a percentage of all losses by an insurance company 
B)  Covers all losses of the insurance company up to a certain amount 
C)  Covers all losses of the insurance company above a certain amount 
D)  Covers all losses of the insurance company between two amounts D

Question 4

Name two refined products of oil on which futures trade.
_ _ _ _ _ _ _ and _ _ _ _ _ _ _ _

Accepted Answer

heating oi

Question 5

Weather derivatives are frequently used to: choose one)

Accepted Answer

A)  Hedge the volume of electricity that will be demanded by customers in the summer 
B)  Hedge the price of oil that must be purchased in the winter 
C)  Hedge the price of electricity that must be purchased in the summer 
D)  Hedge the price and volume of gas that must be purchased for heating in the winter 
A)  Hedge the volume of electricity that will be demanded by customers in the summer 
B)  Hedge the price of oil that must be purchased in the winter 
C)  Hedge the price of electricity that must be purchased in the summer 
D)  Hedge the price and volume of gas that must be purchased for heating in the winter

Question 6

Which of the following typically has the highest volatility? choose one)

Accepted Answer

A)  Crude oil 
B)  Natural gas 
C)  Electricity 
A)  Crude oil 
B)  Natural gas 
C)  Electricity

Question 7

For an equity investor, a CAT bond has: choose one)

Accepted Answer

A)  A great deal of systematic risk 
B)  Very little systematic risk 
C)  A moderate amount of systematic risk 
D)  Negative systematic risk 
A)  A great deal of systematic risk 
B)  Very little systematic risk 
C)  A moderate amount of systematic risk 
D)  Negative systematic risk

Question 8

On a certain day, the highest temperature was 38˚C and the lowest temperature was 26˚C.
i) What was the CDD for the day? _______
ii) What was the HDD for the day? _______

Accepted Answer

The answer of On a certain day, the highest temperature...

A 5×8 contract provides electricity: choose one)

Which of the following typically has the lowest volatility? choose one)

A typical reinsurance contract: choose one)

Name two refined products of oil on which futures trade. _ _ _ _ _ _ _ and _ _ _ _ _ _ _ _

Weather derivatives are frequently used to: choose one)

Which of the following typically has the highest volatility? choose one)

For an equity investor, a CAT bond has: choose one)

On a certain day, the highest temperature was 38˚C and the lowest temperature was 26˚C. i) What was the CDD for the day? _ ii) What was the HDD for the day? _

Introduction

Mechanics of Futures Markets

Hedging Strategies Using Futures

Interest Rates

Determination of Forward and Futures Prices

Interest Rate Futures 7 Swaps

Swaps

Securitization and the Credit Crisis of 2007

Mechanics of Options Markets

Properties of Stock Options

Trading Strategies Involving Options

Introduction to Binomial Trees

Valuing Stock Options: the Black-Scholes-Merton Model

Employee Stock Options

Options on Stock Indices and Currencies

Futures Options

The Greek Letters

Binomial Trees in Practice

Volatility Smiles

Value at Risk

Interest Rate Options

Exotic Options and Other Non-Standard Products

Credit Derivatives

Filters

Exam 24: Weather, Energy and Insurance Derivatives

A 5×8 contract provides electricity: choose one)

Which of the following typically has the lowest volatility? choose one)

A typical reinsurance contract: choose one)

Name two refined products of oil on which futures trade. _ _ _ _ _ _ _ and _ _ _ _ _ _ _ _

Weather derivatives are frequently used to: choose one)

Which of the following typically has the highest volatility? choose one)

For an equity investor, a CAT bond has: choose one)

On a certain day, the highest temperature was 38˚C and the lowest temperature was 26˚C. i) What was the CDD for the day? _______ ii) What was the HDD for the day? _______

Introduction

Mechanics of Futures Markets

Hedging Strategies Using Futures

Interest Rates

Determination of Forward and Futures Prices

Interest Rate Futures 7 Swaps

Swaps

Securitization and the Credit Crisis of 2007

Mechanics of Options Markets

Properties of Stock Options

Trading Strategies Involving Options

Introduction to Binomial Trees

Valuing Stock Options: the Black-Scholes-Merton Model

Employee Stock Options

Options on Stock Indices and Currencies

Futures Options

The Greek Letters

Binomial Trees in Practice

Volatility Smiles

Value at Risk

Interest Rate Options

Exotic Options and Other Non-Standard Products

Credit Derivatives

Filters

On a certain day, the highest temperature was 38˚C and the lowest temperature was 26˚C. i) What was the CDD for the day? _ ii) What was the HDD for the day? _