Pre Session Quiz - Introduction To Derivatives

5 Questions | Total Attempts: 199

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Introduction Quizzes & Trivia

Questions and Answers
  • 1. 
    Derivatives are financial instruments used for
    • A. 

      Speculation ("bets")

    • B. 

      To hedge ("insurance").

    • C. 

      Provide leverage

    • D. 

      All the three options

  • 2. 
    Value for derivatives is derived from?
    • A. 

      Underlying asset

    • B. 

      Face value of the stock

    • C. 

      Liquidity in the market

  • 3. 
    Which one is not a derivative product?
    • A. 

      Forwards

    • B. 

      Futures

    • C. 

      Options

    • D. 

      Equity

  • 4. 
    Hedging  
    • A. 

      Is the process of diversifying risk.

    • B. 

      Is the process of reducing risk by buying risk-free government bonds

    • C. 

      Is the process of reducing risk by engaging in a financial transaction which offsets a position already taken.

    • D. 

      Is the process of trading financial derivatives

  • 5. 
    Arbitrage is an attempt to make risk-free profits
    • A. 

      True

    • B. 

      False

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