Click on the Detail Button to view the Formula Sheet. An option is:
A. The right to buy or sell a commodity at a fixed price
B. The right to buy a commodity at a fixed price
C. The right but not the obligation to buy or sell a commodity at a fixed price
D. The right but not the obligation to buy commodity at a fixed price
Click on the Detail Button to view the Formula Sheet. Which of the following is true?
A. The Euronext.LIFFE short sterling futures contract has a tick value of GBP 12.50 and a face value of GBP 1,000,000
B. The Euronext.LIFFE JPY futures contract has a tick value of JPY 2,500 and a face value of JPY 1,000,000,000
C. The CME eurodollar futures contract has a minimum price interval of one-quarter tick (0.0025) for the nearest contract
D. All of the above
Click on the Detail Button to view the Formula Sheet. The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:
A. Exchange-traded
B. Guaranteed
C. Standardised
D. All of the above
Click on the Detail Button to view the Formula Sheet. An interest rate swap is:
A. A contract to exchange one stream of income payments for another
B. A temporary exchange of one deposit for another of a longer maturity in the same currency
C. A forward-forward contract
D. All of the above
Click on the Detail Button to view the Formula Sheet. How are Overnight Indexed Swaps settled?
A. periodic exchange of fixed and floating payments up to and including maturity
B. at maturity by net payment
C. after maturity by exchange of fixed and floating payments
D. after maturity by net payment
Click on the Detail Button to view the Formula Sheet. Selling a FRA is the same as:
A. Making a forward-forward loan
B. Going over-borrowed
C. Opening a positive gap
D. All of the above
Click on the Detail Button to view the Formula Sheet. A customer sells a LIFFE Euro Swiss futures contract. Which of the following risks could he be trying to hedge?
A. An increase in forward USD/CHF
B. Falling CHF interest rates
C. A decrease in forward USD/CHF
D. Rising CHF interest rates
Click on the Detail Button to view the Formula Sheet. What is the purpose of an initial margin on a futures exchange?
A. To cover losses incurred between variation margin payments
B. To exclude retail investors
C. To pay reserve requirements
D. To cover fees due to the clearing house
Click on the Detail Button to view the Formula Sheet. Today is Monday, 8th December. You sell a 9x12 FRA for value Thursday, 10th September next year. On what date is the settlement amount due to be paid or received (assuming that there are no holidays)?
A. 8th September next year
B. 10th September next year
C. 8th December next year
D. 10th December next year
Click on the Detail Button to view the Formula Sheet. You bought a EUR 8,000,000 6x9 FRA at 4.50%. The settlement rate is 3-month (90-day) EURIBOR, which is fixed at 3.50%. What is the settlement amount at maturity?
A. You pay EUR 20,000.00
B. You receive EUR 20,000.00
C. You pay EUR 19,826.52
D. You receive EUR 19,826.52
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