8 Sep
2021

A Future Contract Is An Agreement To Trade An Asset Mcq

Category:Uncategorized

7. The asset allocation in the market portfolio is: (a) A = 1/2; B = 1/2 (b) A = 1/4; B = 3/4 (c) A = 3/4; B = 1/4 (d) A = 2/3; B = 1/3 (e) A = 1/3; B = 2/3 Questions 7 to 12 refer to the following information. Consider a market that consists of only two assets, A and B. There are 100 shares of Asset A on the market and the price per share is $1.00. There are 100 shares of asset B on the market and the price per share is $2.00. Investment A has an average return, A = 10%. Asset B has an average return, B = 6%. The risk-free interest rate is 5%. The standard deviation of return on the market is 20%. Assuming the market fills the CAPM. 15-19.

Question 15-18, what should be the price of the futures contract to make the individual indifferent between the purchase of the T-Bill (exercise of his option) and the non-exercise of his option? Question 12.Which of the following questions has the right to sell an asset at a predetermined price? (a) A call recorder. (b) A buyer of sale. (c) An appel call buyer. d) A put-writer. 15-8. A person who expects the price of an asset to rise should take a 16. A portfolio consists of two risky assets. When the correlation between the two assets decreases, the standard deviation of the minimum change portfolio increases and the standard deviation of the tangential portfolio increases: (a) increases; Increases the (b); increases (c) remain unchanged; decreases ( d) decreases; increases (e) decreases; reduced 15-4. How much money is raised by an investor representing a fraction of the value of the asset? 4. An OTC futures contract is: (a) an option to call (b) a futures contract whose repayment is outside the duration of the contract; (c) a tailor-made agreement that is not traded on a stock exchange, (d) a standardised agreement traded on a stock exchange; (e) a futures contract in which the spot price of the asset is higher than the development price of the contract answer: (c) a tailor-made agreement that is not traded on a 15-5 exchange. An agreement to accept or deliver an asset at a given future date at a price realized today is called 15-11.

Which of the following exchanges does not trade derivatives? 19. The price of a call option when the volatility of the returns of the underlying increases, and that of a call option when the time before expiry decreases. (a) decreases; remains (b) down; in increase of (c); increases (d) increases; remains increased unchanged; Reduced 15-18. Suppose an investor buys an option for a premium of 1000 $US on an August-T-Bill futures contract of 100,000 $US with an exercise price of 120. At the expiration date, the T-Bill futures contract has a price of 115. (Remember that arbitration makes the spot price match the price of the futures contract.) What is the individual likely to do? 15-9. The method by which an investor expects futures and their spot prices to come together and then thinks about how to hedge against whether spot prices rise or fall in the future is the third question. Which of the following stocks will offset a long position in a futures contract that expires in June? a) Buy any futures contract, regardless of its expiration date. b) Maintain the futures contract until it expires. c) Sell any futures contract, regardless of its expiry date. d) Sell a futures contract that expires in June.

e) Buy a futures contract that expires in June. Question 6. The use of futures contracts to transfer price risks is called (a) arbitration. (b) speculate. and (c) diversification. (d) protection. Question 2.Which of the following information is incorrect? (a) Futures contracts allow fewer delivery options than futures contracts. (b) futures contracts are more liquid than futures contracts. (c) Futures contracts are marked on the market. (d) Futures contracts are traded on a financial exchange. 6. A trader in a commodity plans to trade with a futures contract.

. . .

Teck Lee Tan

Field Engineer and Tech Artist at Unity Technologies

CV

You can also find me at:

Post Categories

  • No categories