What is a derivative instrument?

Quiz FO - Tutorial 1a

Quiz
•
Business
•
University
•
Medium
kelvin lee
Used 3+ times
FREE Resource
8 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An asset that has intrinsic value
A financial instrument that derives its value from an underlying asset
A type of stock
A government bond
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is a disadvantage of forward contracts?
Guaranteed performance
Lack of liquidity and default risk
Standardized features
High liquidity
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary role of a clearinghouse in futures trading?
To provide market analysis
To act as an intermediary and manage counterparty risk
To set prices for futures contracts
To facilitate open outcry trading
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is basis risk?
The risk of price changes in the underlying asset
The risk of market manipulation
The risk of default by a counterparty
The risk associated with the difference between cash price and futures price
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following best describes hedgers in the derivatives market?
They seek to profit from price movements
They aim to reduce risk associated with price fluctuations
They are market makers
They only trade options
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the main difference between commodity derivatives and financial derivatives?
Commodity derivatives are cash-settled
Financial derivatives have tangible underlying assets
Financial derivatives are traded over-the-counter
Commodity derivatives have tangible underlying assets
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does 'contango' refer to in futures trading?
A type of arbitrage opportunity
A method of trading options
Futures prices lower than expected spot prices
Futures prices higher than the expected spot price
8.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the purpose of an option contract?
To provide the obligation to buy or sell an asset
To provide the right but not the obligation to buy or sell an asset
To guarantee delivery of an asset
To standardize trading conditions
Similar Resources on Quizizz
10 questions
Investment & Portfolio Management - Semi Finals Quiz 1

Quiz
•
University
9 questions
Topic 7 Derivative

Quiz
•
KG - University
10 questions
Investment & Portfolio Management - Finals Quiz 1

Quiz
•
University
10 questions
DURATION HEDGING

Quiz
•
University
11 questions
PIF2023 CHAPTER 7

Quiz
•
University
10 questions
Financial Management

Quiz
•
University
10 questions
BAFI3200 W8 Foreign Exchange Risk Exposure and Management

Quiz
•
University
10 questions
Derivatives Market Quiz

Quiz
•
University
Popular Resources on Quizizz
15 questions
Multiplication Facts

Quiz
•
4th Grade
25 questions
SS Combined Advisory Quiz

Quiz
•
6th - 8th Grade
40 questions
Week 4 Student In Class Practice Set

Quiz
•
9th - 12th Grade
40 questions
SOL: ILE DNA Tech, Gen, Evol 2025

Quiz
•
9th - 12th Grade
20 questions
NC Universities (R2H)

Quiz
•
9th - 12th Grade
15 questions
June Review Quiz

Quiz
•
Professional Development
20 questions
Congruent and Similar Triangles

Quiz
•
8th Grade
25 questions
Triangle Inequalities

Quiz
•
10th - 12th Grade