Question 1

Futures contracts are regularly traded on the ________.

Accepted Answer

A) Montreal Exchange 
B) Toronto Stock Exchange 
C) American Stock Exchange 
D) Chicago Board of Options Exchange 
A) Montreal Exchange 
B) Toronto Stock Exchange 
C) American Stock Exchange 
D) Chicago Board of Options Exchange

Question 2

Which of the following features of futures contracts were not designed to increase liquidity?

Accepted Answer

A) Standardized contracts 
B) Traded up until maturity 
C) Not tied to one specific type of bond 
D) Can be closed with off setting trade 
A) Standardized contracts 
B) Traded up until maturity 
C) Not tied to one specific type of bond 
D) Can be closed with off setting trade

Question 3

The advantage of forward contracts over futures contracts is that forward contracts ________.

Accepted Answer

A) are standardized 
B) have lower default risk 
C) are more flexible 
D) have higher default risk 
A) are standardized 
B) have lower default risk 
C) are more flexible 
D) have higher default risk

Question 4

The price specified in an option contract at which the holder can buy or sell the underlying asset is called the ________.

Accepted Answer

A) premium 
B) call 
C) strike price 
D) put 
A) premium 
B) call 
C) strike price 
D) put

Question 5

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 $________.

Accepted Answer

A) loss; 50000 
B) loss; 200 
C) profit; 50000 
D) profit; 200 
A) loss; 50000 
B) loss; 200 
C) profit; 50000 
D) profit; 200

Question 6

Which of the following features of futures contracts were not designed to increase liquidity?

Accepted Answer

A) Standardized contracts 
B) Traded up until maturity 
C) Not tied to one specific type of bond 
D) Marked to market daily 
A) Standardized contracts 
B) Traded up until maturity 
C) Not tied to one specific type of bond 
D) Marked to market daily

Question 7

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

Accepted Answer

A) A bond-linked note 
B) A linked note 
C) A credit-linked note 
D) None of the above 
A) A bond-linked note 
B) A linked note 
C) A credit-linked note 
D) None of the above

Question 8

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

Accepted Answer

A) the call will be exercised 
B) the put will be exercised 
C) the call will not be exercised 
D) the put will not be exercised 
A) the call will be exercised 
B) the put will be exercised 
C) the call will not be exercised 
D) the put will not be exercised

Question 9

If you sell 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 $________.

Accepted Answer

A) loss; 20000 
B) loss; 20 
C) profit; 20000 
D) profit; 20 
A) loss; 20000 
B) loss; 20 
C) profit; 20000 
D) profit; 20

Question 10

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

Accepted Answer

A) $100,000 face value securities for $115,000 
B) $115,000 face value securities for $110,000 
C) $100,000 face value securities for $100,000 
D) $115,000 face value securities for $115,000 
A) $100,000 face value securities for $115,000 
B) $115,000 face value securities for $110,000 
C) $100,000 face value securities for $100,000 
D) $115,000 face value securities for $115,000

Futures contracts are regularly traded on the ________.

Which of the following features of futures contracts were not designed to increase liquidity?

The advantage of forward contracts over futures contracts is that forward contracts ________.

The price specified in an option contract at which the holder can buy or sell the underlying asset is called the ________.

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 $.

Which of the following features of futures contracts were not designed to increase liquidity?

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

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

If you sell 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 $.

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

Why Study Money, Banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Markets

The ISLM Model

Non-Bank Finance

Filters

Exam 13: Risk Management With Financial Derivatives

Futures contracts are regularly traded on the ________.

Which of the following features of futures contracts were not designed to increase liquidity?

The advantage of forward contracts over futures contracts is that forward contracts ________.

The price specified in an option contract at which the holder can buy or sell the underlying asset is called the ________.

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 $________.

Which of the following features of futures contracts were not designed to increase liquidity?

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

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

If you sell 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 $________.

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

Why Study Money, Banking, and Financial Markets

An Overview of the Financial System

What Is Money

Understanding Interest Rates

The Behaviour of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Financial Crises

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Banking and the Management of Financial Institutions

Central Banks and the Bank of Canada

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, Inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Financial Crises in Emerging Markets

The ISLM Model

Non-Bank Finance

Filters

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 $.

If you sell 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 $.