Fin 3105 Terms

1. 1the most basic derivative product available

   1. Aforward contract
   2. Bfutures contract
   3. Coption contract
2. 2gives its holder both the right and full obligation to conduct a transaction involving another security or commodity

   1. Aforward contract
   2. Bfutures contract
   3. Coption contract
3. 3the future date on which the transaction is to be consummated, also called "expiration date"

   1. Acontract's maturity
   2. Bfuture contract's maturity
   3. Cforward contract's maturity
4. 4the predetermined price at which the trade takes place

   1. Acontract price
   2. Bfutures price
   3. Coptions price
5. 5the eventual buyer or long position, who pays the contract price and receives the underlying security

   1. Acounterparties
   2. Bparty
6. 6they are more appropriately viewed as trade agreement negotiated directly between two parties for a transaction that is scheduled to take place in the future.

   1. Aforward and spot markets
   2. Bforward and future markets
7. 7Forward contracts are negotiated in the over-the-counter market. This means that forward contracts are agreements between two private parties

   1. Aforward and future markets
   2. Bforward and spot market
8. 8try to solve this problem by standardizing the terms of the agreement (e.g., expiration date, identity, and amount of the underlying asset) and having both parties trade through a centralized market, called a futures exchange.

   1. Afutures contracts
   2. Bforward contracts
   3. Coption contracts
9. 9during the life of a contract, is set at a level such that a brand-new long or short position would not have to pay an initial premium.

   1. Afutures price
   2. Bforward contract price
   3. Coption price
10. 10gives its holder the right--but not the obligation--to conduct a transaction involving an underlying security or commodity at a predetermined future date and at a predetermined price.

    1. Aoption contract
    2. Bforward contract
    3. Cfutures contract

11. 11options trade both in over-the-counter markets and on exchanges. When exchange-traded, just the seller of the contract is required to post a margin account because he is the only one obligated to perform on the contract at a later date

    1. Aoption trading markets
    2. Bforward and future markets
    3. Cforward and spot markets

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Quiz on Fin 3105 Terms, created by Riegn Bethany Salmo on 14/12/2022.

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Riegn Bethany Salmo

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