Which of the following involves an additional source of basis risk due to the difference between the asset being hedged and the asset underlying the futures?
A. Long hedge
B. Short hedge
C. Cross hedge
D. Stack hedge
Which of the following measures the sensitivity of the asset's price to interest rate movements, expressed as a number of years?
A. Duration
B. Yield to maturity
C. Convexity
D. Immunization
Which of the following is the right to buy?
A. Put option
B. Strategic option
C. System option
D. Call option
The practice of spreading money among different investments to reduce risk is known as _______.
A. Diversification
B. Risk aversion
C. Securitization
D. Sector rotation
Which of the following types of bonds are usually unsecured debts maturing in 20-40 years and paying semi-annual interest?
A. Municipal bonds
B. Convertible bonds
C. Zero coupon bonds
D. Corporate bonds
Which of the following index is also known as value weighting?
A. Price weighting
B. Equal weighting
C. Base weighting
D. Capitalization weighting
Which of the following considers the size of the company and needs no adjustment for stock splits?
A. Price weighting
B. Capitalization weighting
C. Equal weighting
D. Base weighting
An insurance policy providing excess liability coverage for homeowner's and automobile insurance as well as additional coverage not provided by either policy is referred as:
A. Personal liability umbrella policy
B. Captive agent
C. Independent agent
D. Claims adjuster
What can be the possible strategy to avoid liability?
A. Understand what causes liability
B. Develop you own safety program
C. Carry adequate liability insurance
D. None of these
It is an automobile insurance that reimburses the parties involved in an accident without regard to negligence.
A. No-fault automobile insurance
B. Comprehensive automobile insurance
C. Collision insurance
D. Automobile accidental damage coverage
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