Derivatives Quiz

Identify which of the following regarding OTC derivatives is most likely acceptable?

A derivative contract that is least likely to be considered a contingent claim:

Determine the statement for options at expiration that is least accurate

The clearinghouse is intended to prevent:

When companies do have correlated risks, with a default at one company causing a default at another company, this is described as:

Arbitrage is least likely about…..

Arbitrage prevents:

Identify the situation representing an arbitrage opportunity.

If A forward contract & a futures contract are on the same underlying asset over the same term. After initiation of the contracts, the asset price falls.  Through the contract it is most likely that:

3 items with the same spot price. Asset W has no costs or benefits; Asset M has costs of carry, but no benefits; Asset Z has benefits of carry, but no costs. The forward contract with the lowest price is likely to be the contract written on:

When interest rates are positively correlated with futures prices, the price of the futures contract is most likely:

Regarding interest rate futures & forward-rate agreements, as interest rates change:

a swap value is equal to:

A swap is similar to a series of forward rate agreements (FRAs), except that: