Question 1

The key difference between a forward and a futures contract is:

Accepted Answer

A) A forward contract is customized where a futures contract is not. 
B) A forward contract is bought and sold on organized exchanges. 
C) Only the forward contracts have settlement dates. 
D) The amount of time involved. 
A) A forward contract is customized where a futures contract is not. 
B) A forward contract is bought and sold on organized exchanges. 
C) Only the forward contracts have settlement dates. 
D) The amount of time involved.

Question 2

If the current closing price in the stock of XYZ, Inc.is $87.50 and the July expiration put options with a strike price of $80 are selling for $1.05, what is the intrinsic value of the option? What is the option premium?

Accepted Answer

The intrinsic value of a put option is t

Question 3

The principal in an interest rate swap is:

Accepted Answer

A) Always transferred from the originator to the counterparty of the swap. 
B) Is usually held by a clearinghouse to guarantee payment. 
C) Usually borrowed from a third party. 
D) Is not borrowed, lent, or exchanged.It just serves as the basis for the calculation of cash flows. 
A) Always transferred from the originator to the counterparty of the swap. 
B) Is usually held by a clearinghouse to guarantee payment. 
C) Usually borrowed from a third party. 
D) Is not borrowed, lent, or exchanged.It just serves as the basis for the calculation of cash flows.

The key difference between a forward and a futures contract is:

If the current closing price in the stock of XYZ, Inc.is $87.50 and the July expiration put options with a strike price of $80 are selling for $1.05, what is the intrinsic value of the option? What is the option premium?

The principal in an interest rate swap is:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value, and Interest Rates

Understanding Risk

Bonds, Bond Prices, and the Determination of Interest Rates

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets, and Market Efficiency

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: the Federal Reserve and the European Central Bank

The Central Bank Balance Sheet and the Money Supply Process

Monetary Policy: Stabilizing the Domestic Economy

Exchange-Rate Policy and the Central Bank

Money Growth, Money Demand, and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

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Exam 9: Derivatives: Futures, Options, and Swaps

The key difference between a forward and a futures contract is:

If the current closing price in the stock of XYZ, Inc.is $87.50 and the July expiration put options with a strike price of $80 are selling for $1.05, what is the intrinsic value of the option? What is the option premium?

The principal in an interest rate swap is:

An Introduction to Money and the Financial System

Money and the Payments System

Financial Instruments, Financial Markets, and Financial Institutions

Future Value, Present Value, and Interest Rates

Understanding Risk

Bonds, Bond Prices, and the Determination of Interest Rates

The Risk and Term Structure of Interest Rates

Stocks, Stock Markets, and Market Efficiency

Foreign Exchange

The Economics of Financial Intermediation

Depository Institutions: Banks and Bank Management

Financial Industry Structure

Regulating the Financial System

Central Banks in the World Today

The Structure of Central Banks: the Federal Reserve and the European Central Bank

The Central Bank Balance Sheet and the Money Supply Process

Monetary Policy: Stabilizing the Domestic Economy

Exchange-Rate Policy and the Central Bank

Money Growth, Money Demand, and Modern Monetary Policy

Output, Inflation, and Monetary Policy

Understanding Business Cycle Fluctuations

Modern Monetary Policy and the Challenges Facing Central Bankers

Filters