ch25 - Financial Markets and Institutions, 6e...

Info iconThis preview shows pages 1–104. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Financial Markets and Institutions, 6e (Mishkin/Eakins) Chapter 25 1 Hedging with Financial Derivatives 25.1 Multi ple Choi ce 1) Financial derivatives include A) stocks. B) bonds. C) futures. D) none of the above. Answer: C Question Status: Previous Edition 2) Financial derivatives include A) stocks. B) bonds. C) forward contracts. D) both A and B. Answer: C Question Status: Previous Edition 3) Which of the following is not a financial derivative? A) Stock B) Futures C) Options D) Forward contracts Answer: A Question Status: Previous Edition 4) A contract that requires the investor to buy securities on a future date is called a A) short contract. B) long contract. C) hedge. D) cross. Answer: B Question Status: Previous Edition 5) A contract that requires the investor to sell securities on a future date is called a A) short contract. B) long contract. C) hedge. D) micro hedge. Answer: A Question Status: Previous Edition 6) A long contract requires that the investor A) sell securities in the future. B) buy securities in the future. C) hedge in the future. D) close out his position in the future. Answer: B Question Status: Previous Edition 7) A short contract requires that the investor A) sell securities in the future. B) buy securities in the future. C) hedge in the future. D) close out his position in the future. Answer: A Question Status: Previous Edition 8) Which is not a problem of forward contracts? A) a lack of liquidity B) a lack of flexibility C) the difficulty of finding a counterparty D) default risk Answer: B Question Status: Previous Edition 9) By selling short a futures contract of $100,000 at a price of 115, you are agreeing to deliver _________ face value securities for _________. A) $100,000; $115,000 B) $115,000; $110,000 C) $100,000; $100,000 D) $115,000; $115,000 Answer: A Question Status: Previous Edition 10) By selling short a futures contract of $100,000 at a price of 96, you are agreeing to deliver _________ face value securities for _________. A) $100,000; $104,167 B) $96,000; $100,000 C) $100,000; $96,000 D) $100,000; $100,000 Answer: C Question Status: Previous Edition 11) By buying a long $100,000 futures contract for 115, you agree to pay _________ for _________ face value securities. A) $100,000; $115,000 B) $115,000; $100,000 C) $86,956; $100,000 D) $86,956; $115,000 Answer: B Question Status: Previous Edition 12) If you sell a short contract on financial futures, you hope interest rates will A) rise. B) fall. C) not change. D) fluctuate. Answer: A Question Status: Previous Edition 13) If you buy a long contract on financial futures, you hope interest rates will A) rise. B) fall. C) not change. D) fluctuate. Answer: B Question Status: Previous Edition 14) If you sell a short futures contract, you hope that bond prices will A) rise. B) fall. C) not change. D) fluctuate. Answer: B Question Status: Previous Edition 15) The...
View Full Document

This note was uploaded on 10/17/2011 for the course ECON 317 taught by Professor Guidry during the Spring '11 term at Nicholls State.

Page1 / 664

ch25 - Financial Markets and Institutions, 6e...

This preview shows document pages 1 - 104. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online