CHAPTER 21
AN INTRODUCTION TO DERIVATIVE MARKETS AND SECURITIES
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TRUE/FALSE QUESTIONS
(t) 1 A cash or spot contract is an agreement for the immediate delivery of an ast such as the purcha of stock on the NYSE.
实用英语(t) 2 Forward and future contracts, as well as options, are types of derivative curities.
(f) 3 All features of a forward contract are standardized, except for price and number of contracts.
(t) 4 Forward contracts are traded over-the-counter and are generally not standardized.
(t) 5 The forward market has low liquidity relative to the futures market.
(f) 6 A futures contract is an agreement between a trader and the clearinghou of the exchange for delivery of an ast in the future.
(t) 7 A primary function of futures markets is to allow investors to transfer risk.
(f) 8 The futures market is a dealer market where all the details of the transactions are negotiated.
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(f) 9 Futures contracts are slower to absorb new information than forward contracts.
(f) 10 The initial value of a future contract is the price agreed upon in the contract.
(t) 11 A futures contract eliminates uncertainty about the future spot price that an individual can expect to pay for an ast at the time of delivery.探测制导与控制技术
(f) 12 Investment costs are generally higher in the derivative markets than in the corresponding cash markets.
(f) 13 An option buyer must exerci the option on or before the expiration date.
湖南英语三级成绩查询(t) 14 The minimum value of an option is zero.
(f) 15 An option to ll an ast is referred to as a call, whereas an option to buy an ast is called a put.
(t) 16 If an investor wants to acquire the right to buy or ll an ast, but not the obligation to do it, the best instrument is an option rather than a futures contract.
reventon怎么读(t) 17 Investors buy call options becau they expect the price of the underlying stock to increa before the expiration of the option.
(t) 18 A call option is in the money if the current market price is above the strike price.
(f) 19 A put option is in the money if the current market price is above the strike price.
(t) 20 The price at which the stock can be acquired or sold is the exerci price.
(t) 21 The minimum amount that must be maintained in an account is called the maintenance margin.
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MULTIPLE CHOICE QUESTIONS
(d) 1 Which of the following statements is fal?
a) Derivatives help shift risk from risk-adver investors to risk-takers.
b) Derivatives assist in forming cash prices.
c) Derivatives provide additional information to the market.
d) In many cas, the investment in derivatives (both commissions and required investment) is more than in the cash market.
e) None of the above (that is, all are reasons)
(e) 2 Derivative instruments exist becau
a) They help shift risk from risk-aver investors to risk-takers.
b) They help in forming prices.
c) They have lower investment costs.
d) Choices a and b北京英语外教
e) All of the above
(c) 3 There are in number of differences between forward and futures contracts. Which of the following statements is fal?
a) Futures have less liquidity risk than forward contracts.
b) Futures have less credit risk than forward contracts.
c) Futures have more default risk than forward contracts.
d) In futures, the exchange becomes the counterparty to all transactions.
e)None of the above (that is, all statements are true)
(d) 4 Futures differ from forward contracts becau
a) Futures have more liquidity risk.
b) Futures have more credit risk.
c) Futures have more maturity risk.
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d) None of the above
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e) All of the above
(d) 5 The price at which a futures contract is t at the end of the day is the
a) Stock price.
b) Strike price.
c) Maintenance price.
d) Settlement price.
e)Parity price.
(e) 6 Which of the following statements is true?
a) The buyer of a futures contract is said to be long futures.
b) The ller of a futures contract is said to be short futures.
c) The ller of a futures contract is said to be long futures.
d) The buyer of a futures contract is said to be short futures.
e) Choices a and b
(b) 7 The CBOE brought numerous innovations to the option market, which of the following is not such an innovation?
a) Creation of a central marketplace
b) Creation of a non-liquid condary option market
c) Introduction of a Clearing Corporation
d) Standardization of all expiration dates
e) Standardization of all exerci prices
