LO4 FSA

Are contracts to exchange cash flows as of a specific date or a series of specific dates based on a notional amount and fixed or floating rates.

• Future Contracts

• Forward Contracts

• Interest Rate Swaps

• Foreign Currency Exchange

Contracts that are standardized in nature

• Future Contracts

• Forward Contracts

• Interest Rate Swaps

• Foreign Currency Exchange

Does not require a daily cash settlement for underlying contract price changes

• Future Contracts

• Forward Contracts

• Options

• Foreign Currency Exchange

Are currency futures contracts that indicate the cost of exchanging one currency for another at a future date

• Future Contracts

• Forward Contracts

• Options

• Foreign Currency Exchange

A financial instrument that does not require an initial net investment.

• Commodities

• FOREX

• Contracts

• Derivatives

Are financial derivatives that provide buyers with the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and date.

• Future Contracts

• Forward Contracts

• Options

• Interest Rate Swaps

It is the tendency of an investment or market to rise or fall in price within a short period of time.

____ traders bid up prices on a good news day, while ____ traders drive prices down on bad news.

It refers to the risk that a lender may not receive the owed principal and interest.

• market risk

• credit risk

• opportunity risk

To assess credit risk on a consumer loan, lenders look at the five Cs.

What are the 5 Cs?