Exam 14: Risk Management With Financial Derivatives

The seller of an option has the ________ to buy or sell the underlying asset,while the purchaser of an option has the ________ to buy or sell the asset.

If you sell in April a stock index future contract on the S&P 500 index at the price of 1200 points that matures on June 30 of the same year and on the maturity date the S&P 500 Index is at 1000,you have a ________ of $________.

What is an interest-rate futures contract? How does it differ from an interest-rate forward contract?

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 110,you will ________ the option and potentially make a profit of $________.

A long position requires that the investor ________.

If you buy a futures contract on the S&P 500 Index at a price of 450 and the index rises to 500,you will ________.

If you buy in March a bond future contract for 150 that matures on June 30 of the same year,and on the maturity date the same future sells for 170,you have a ________ of $________.

An option that can be exercised at any time up to maturity is called a(n)________.

An increase in the exercise price,all other things held constant,will ________ the premium on call options.

An increase in the volatility of the underlying asset,all other things held constant,will ________ the option premium.