Ünite Sınavı Soruları

1. A derivative as defined by Security and Exchange Commission (SEC) is: “a type of financial instrument whose value is derived from another underlying product”.
2. By derivative product, we mean those financial instruments that derive its value from the performance of an underlying (asset).
3. In other words, a derivative is a legal contract that involves two parties, a buyer and a seller who agree to do something for each other.
4. Derivative contracts are recognized by the legal system as commercial contracts and they set the right and obligations of each involved party.

Which of the statements above related to derivatives are correct?

All of the following is can be said about derivatives, except...

While transacting on the futures market, it is required that both involving parties must deposit a minimum sum of money as an initial margin in their margin account, typically less than 10% of the futures price to cover possible future losses.

It can be said that both the long and the short parties are engaged in a zero-sum game, meaning that one participant’s gains are the other party’s losses.

Similar to futures and forward contracts, swap contracts do not require money exchange at the beginning of the contract, the initial value of a swap contract is zero.

Option exchanges are considered to be a zero-sum game in efficient markets. The gain or loss on one side of an agreement precisely counterbalances the gain or loss on the opposite side of the agreement.

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

Which of the following shows the result of spot price at expiration minus forward price?

Which of the following can be defined as a derivative security?

A type of derivatives are standardized such that its terms and conditions are precisely specified defined as…………………………?

Which of the following is not one of the differences between futures and swaps?

What is the main difference between a futures contract and a forward contract? 

What does contingent claim mean?

All of the following is true about futures contracts, except...

1. Price of underlying asset
2. Strike price
3. Volatility
4. Interest rate

Which of the factors above are used as main variables in the Black-Scholes option pricing model? 

Which of the following swap types defined as "plain vanilla" swap?

Which of the following is not a derivative insturement? 

 How can it be defined swap?

What is the initial value of swaps at the beginning of the contract?

1. Futures contracts are the same as forward contracts except that futures contracts are organized, regulated and managed by an Exchange, in other words, futures contracts are standardized.
2. A futures contract is an agreement made through an organized exchange to buy or to sell a fixed amount of an underlying commodity or financial asset on a future date (or within a range of dates) at an agreed price.
3. Unlike forward contracts, futures contracts require the existence of a legally recognized futures exchange that provides, manages and organizes these contracts.
4. On the exchange, not all types of derivatives are allowed, only certain contracts are authorized for trading.
5. Futures contracts can be accessed through both physical locations as well as through an electronic system.
6. The derivative exchange has a mechanism that offers the two parties a guarantee against any default.
7. An organized Exchange has a Clearing house through which it settles daily the losses and gains of futures contracts and protects itself against loss.

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

1. A swap contract can be defined as an over-the-counter derivatives markets (OTC) contract between two parties who agree to exchange cash flows on regular dates, where one party pays a variable payment, and the other party pays either a fixed or variable amount calculated on a different basis.
2. Since swap is an OTC contract, it contains terms and conditions such as the identity of the underlying asset, dates of payments, and the procedure of payment that are agreed upon and written in the contract.
3. In currency swap trades, one party trades swaps currency for a fixed interest rate and where another party trades another currency for a floating interest.
4. Traders usually exchange only the difference in interest payments.
5. In swap trades, the principal traded is called notional.

Which of the statements above related to sawps are correct?

Which of the following is the most popular type of swap that for fixed-for-floating interest rate swap and was introduced to the market in the 1980s?