Ünite Sınavı Soruları

1. Any participant that wants to engage in exchange-traded derivative needs to deposit cash usually called margin bond or performance bonds that secures that there will not be any default.
2. The other attribute of clearing houses is that there are daily settlements and any party, which is in the profit as a result of the performance of the underlying asset, the clearinghouse deducts money from the losing party and adds them to the winner party.
3. In the over-the-counter derivatives markets, investors directly trade legal derivative contracts without involving an intermediary.
4. The over-the-counter derivatives markets are also called informal derivative markets because the engaged parties are not obligated to carry out their promises.
5. Though both buyer and seller of OTC contracts informally agree to buy or sell derivative contracts, there is still the possibility of a default.
6. The OTC contracts are customized contracts, and they are less liquid than exchange-traded derivative contracts and also relatively less transparent.

Which of the statements above related to derivative markets are correct?

"The Clearing house requires investors to deposit an initial margin, which is then used in the marking-to-market or settling of changes in the value of contracts on a day to day basis."

Which of the following is the derivative mentioned in the above sentence?

1. Almost all multinational corporations use options as a tool to manage their exposure to currency risk, and exchange rates are the underlying assets in their case.
2. Options are contingent claim contracts that provide the right but not the obligation to buy an asset at a specific price at a later date in the future.
3. Based on the right to exercise a buy or sell, options contracts can be divided into two: call options and put options.
4. A call option is the right to buy an underlying asset, while a put option is the right to sell an underlying asset.
5. Options can also be divided into two types according to the time when options can be exercised: American Options and European Options.
6. American Options can be exercised any time up to the expiration date, while European Options are exercised only on the expiration date.

Which of the statements above related to option contracts are correct?

How does a put option work?

I. Arbitrage pricing model

II. Binominal pricing model

III. Black-Scholes pricing model

Which of above is/are among the option pricing models?

Which of the following statements is true?

How does an option work?

All of the following is true about exchange traded markets, except...

What is binominal option pricing model?

1. Forward contracts
2. Futures contracts
3. Swap contracts
4. Option contracts

Which of the above are classified as derivative instruments whose performance is determined by underlying assets?

Which of the following statements is false?

I. Expected future price of the underlying asset

Adam enters into a futures contract with Eve to sell 100 bitcoins in 60 days with a future value of $5,300. At the settlement date, bitcoin price drops to  $4,900. What is the payoff to the party with short position? 

The OTC contracts are less ............... and less ............... than exchange-traded derivative contracts?

If a quote on a U.S. Treasury bond 5.60% BEY (Bond Equivalent Yield), then what is the MMY (Money Market Yield)?

Which of the following sentence is ture?

1. There are two types of derivatives: forward commitments, and contingent claims.
2. Forward commitments contracts (such as forward contracts, futures contracts, and swaps) provide a buyer or seller the ability to lock in a price to buy or sell an underlying asset.
3. Contingent claims (such as option) provide a buyer or a seller the right to buy or sell an underlying asset at a price previously fixed..
4. There are two categories of markets where derivatives are created: Exchange-traded derivatives markets and Over-the-counter derivatives markets (OTC).
5. Exchange-traded derivatives are standardized such that its terms and conditions are precisely specified by the Exchange.
6. OTC is the customizable contract that can be customized by the involving parties.

Which of the statements above related to derivatives and derivative markets are correct?

What is the main role of a clearinghouse in derivative markets?