Derivatives Quiz

Derivatives Quiz

University

10 Qs

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Derivatives Quiz

Derivatives Quiz

Assessment

Quiz

Mathematics

University

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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is an example of a derivative? 


 A share of Apple stock


A U.S. Treasury bond 


A futures contract for oil 


 A savings account at a bank


2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is not a characteristic of forward contracts?


Customised terms 


Traded over-the-counter 


Standardized contract size 


Higher counterparty risk than futures


3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The difference between the spot price and the futures price is known as:

 Arbitrage

 Premium

Basis

Spread


4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the maximum loss for the buyer of a call option?


 Unlimited


 The strike price


The premium paid  

The difference between the strike price and the market price


5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary purpose of the margin requirement in futures trading?


 To increase trading volume


 To reduce counterparty risk


 To limit the number of contracts a trader can hold 


To ensure physical delivery of the underlying asset


6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following best describes the relationship between option premium, intrinsic value, and time value? 


 Premium = Intrinsic value - Time value


 Premium = Intrinsic value + Time value


Premium = Time value - Intrinsic value


Premium = Intrinsic value × Time value


7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

You sold one XYZ Stock Futures contract at Rs. 278 and the lot size is 1,200. What is your profit (+) or loss (-), if you purchase the contract back at Rs. 265?


16,600 


15,600 


-15,600 


-16,600


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