FIN459659 An Introduction to Derivatives
Quiz#1
You have 30 minutes to complete the quiz. The quiz is open book, open notes, open calculator. No
consulting with other students is allowed. Good luck!
1.
(5 point) A derivative security is a financial contract that gives you control of a commodity.
a.
True
b.
False
2.
(5 points) A stock option is not a derivative security because the commodity is a share of
common stock.
a.
True
b.
False
3.
(5 points) The value of the commodity controlled by a derivative security is:
a.
The derivative price
b.
The derivative margin
c.
The derivative notional value
d.
The derivative strike price
4.
(5 points) High leverage means
a.
That large movements in the price of the commodity create large movements in the
derivative price.
b.
That small movements in the price of the commodity create large movements in the
derivative price.
c.
That small movements in the price of the commodity create large movements in the
value of the derivative.
d.
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 Spring '07
 Yildary
 Derivatives, crude oil, crude oil futures, heating oil contract

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