Exam 14: Risk Management With Financial Derivatives

If you buy a European call option on Canada bonds with a strike price of 110 assuming that the premium is $0,and on the maturity date the market price of Canada bonds is 117,you will ________ the option in order to make a profit of $________.

If you buy in March a bond future contract for 97 that matures on June 30 of the same year,and at the maturity date the same future sells for 93,you have a ________ of $________.

if you buy an option to sell Canada futures at 115,and at expiration the market price is 110,________.

If you buy in March a bond future contract for 125 that matures on June 30 of the same year,and at the maturity date the same future sells for 135,you have a ________ of $________.

By selling short a futures contract of $100,000 at a price of 96,you are agreeing to deliver ________.

Where are financial futures traded? Describe that market.

Which of the following is a likely reason for a money market fund manager to sell a stock index future short?

If you sell in March a bond future contract for 97 that matures on June 30 of the same year,and at the maturity date the same future sells for 93,you have a ________ of $________.

As compared to a default on the notional principle,a default on a swap ________.

Which credit derivative is a combination of a bond and a credit option?

A contract that requires the investor to buy securities on a future date is called a ________.

By selling short a futures contract of $100,000 at a price of 115,you are agreeing to deliver ________.

If you buy a European call option on Canada bonds with a strike price of 115 assuming that the premium is $0,and on the maturity date the market price of Canada bonds is 120,you will ________ the option in order to make a profit of $________.

One advantage of using swaps to eliminate interest-rate risk is that swaps ________.

A call option gives the seller ________.

________ derivatives offer payoffs on previously issued securities,but ones that bear credit risk.

If you buy an option to sell Canada futures at 110,and at expiration the market price is 115,________.

If you buy an option to buy Canada futures at 115,and at expiration the market price is 110,________.

If you bought a long contract on financial futures,you hope that interest rates ________.

If you buy in March a bond future contract for 110 that matures on June 30 of the same year,and at the maturity date the same future sells for 125,you have a ________ of $________.