Top 150+ Solved Financial Derivatives and Risk Management MCQ Questions Answer
Q. The payoffs for financial derivatives are linked to
a. securitiesthat will be issued in the future
b. the volatility of interest rates
c. previously issued securities
d. government regulations specifying allowable rates of return.
Q. By hedging Portfolio a bank manager
a. Reducesinterest rate risk
b. Increases exchange rate risk
c. Increases reinvestment risk
d. Increase the probability of gains
Q. The markets in which derivatives are trade is known as
a. Asset backed market
b. Cash market
c. Mortgage market
d. Derivative market
Q. The contract where buyer and seller agrees to exchange asset on future date without the involvementof stock exchange
a. Options
b. Futures
c. Forwards
d. Swaps
Q. The contract which gives the buyer the right but not obligation
a. Options
b. Futures
c. Swaps
d. Forwards
Q. The buyer in the derivative contract is also known as
a. Deep in the contract
b. Middle in the contract
c. Short in the contract
d. Long in the contract
Q. ETD stands for
a. Electronic traded serivatives
b. Equity traded derivatives
c. Exchange traded derivatives
d. Estimated trade delay
Q. Market players who take benefits from difference in market prices are called
a. Speculators
b. Arbitrageurs
c. Hedgers
d. Spreaders
Q. Which of the following is potentially obligated to sell an asset at a predetermined price
a. Put writer
b. A call writer
c. A put buyer
d. A call buyer
Q. Which of the following contract is non standardised and suffers illiquidity most
a. Swaps
b. Forwards
c. Options
d. Futures
Q. The initial amount paid by option buyer at the time of entering the contract
a. Option margin
b. Option premium
c. Option money
d. Option title
Q. The difference between strike price and current market price of underlying security in optioncontract is
a. Time value
b. Intrinsic value
c. Exchange value
d. Trade value
Q. The option contract which gives the buyer the right to buy the underlying asset is
a. Put option
b. Call option
c. European option
d. Bermudan option