C) Future's on commodities
D Futures on stock indice's
Answer: D
20) A limit order
A) Is an order to trade up to a certain number of futures contracts at a certain price
B) Is an order that can he executed at a specied price or one more favorable to the
i
Fundamentals of Futures and Options Markets, Se (Hull)
Chapter 2 Mechanics of Futures Markets
1) Which of the following is true?
A) Both forward and futures contracts are traded on exchanges
B) Forward contracts are traded on exchanges, but ltures contrac
2) Which of the following is NOT true?
A) When a CBOE call option on IBM is exercised, [BM issues more stock
B) An American option can be exercised at any time during its life
C) Ari call option will always be exercised at maturity if the underlying asset
Set 14: Wiener Processes and Its Lemma
1. What are the 4 types of stochastic processes?
2. Which type did we use in the previous chapter when implementing a binomial tree?
3. What type do we use in this chapter when laying the foundation for Black Scholes
Set 21: Option Price Via Simulation
1. What is a random number generator?
2. What are some common statistical distributions?
3. How do you simulate a random number in Excel from a uniform distribution?
4. How do you simulate a random number in Excel from
Set 6: Interest Rate Swaps: Pricing via Das Spreadsheet
1. In Das first valuation, which curve is input?
Spot Curve
2. How does Das derive the coupon rates?
Convert a semi-annual rate to a continuous rate
3. How does he derive the discount factors?
Contin
Set 13: Binomial Trees
1. What is a binomial tree?
2. What are the underlying assets of an equity option?
3. How many states of the world are allowed in the binomial tree?
4. What is a node?
5. What securities are given as inputs at each node?
6. What sec
Set 12: Trading Strategies Involving Options
1. What 3 things do you need to get correct to make money with a call or put option?
2. How does buying a combination of calls and puts change that?
3. What is the difference between bullish and bearish?
4. Wha
Set 15 (double set!): The Black-Scholes Model
1. What year did Fischer Black and Myron Scholes publish their paper?
2. What year was a Nobel prize awarded for this model? Who won?
3. What is the Nobel-winning idea in the model?
4. How does the drift term
Set 19: Greeks 3: Theta and Gamma
1. What is theta?
2. What is the formula for theta for a call option?
3. What is the sign for theta in a long position? What is the sign for theta in a short position?
4. What is gamma?
5. What is gammas relationship to d
Set 19: Greeks 4: Vega
1. What is a parameter?
2. What is a variable?
3. Whats the difference between a Greek and a pseudo-Greek?
4. What is vega?
5. What is the formula for vega?
6. How does vega relate to an options value? Does it depend on whether its
Set 11: Properties of Stock Options
1. Explain the difference between buying a call and selling a put.
Buying a call costs money. Selling a put makes money(riskier!)
2. What does higher S to the value of a call? increase
3. What does higher S to the value
Set 19: Greeks 2 Delta Hedging
Follow these steps to simulate delta hedging in a spreadsheet.
1. Using the BS derivation from class, what is the discrete equation to simulate the stock price?
2. To calculate the value of the stock increment, what are the
Set 7c: Interest Rate Swaps: Pricing via Choudhry and Joshi
1. In Choudhrys valuation, which curve is input?
Spot Curve
2. How is the discount factor derived?
=1/( (1+zero rate)^t)
3. How is the forward rate derived?
Bootstrapping
4. Why are the fixed pay
Set 11: Properties of Stock Options
1. Explain the difference between buying a call and selling a put.
2. What does higher S to the value of a call?
3. What does higher S to the value of a put?
4. What does higher K to the value of a call?
5. What does hi
Set 10: Mechanics of Options Markets
1. How is a stock option a derivative? What are the underlying assets?
2. How do options include leverage?
3. Which has more credit risk, exchange-traded or OTC options?
4. Are you allowed to buy options on margin? If
Set 7a: Interest Rate Swaps: The Basics
1. Why is it called a swap?
Fixed for floating.
2. How much and how often does cash change hands?
0 at inception. Netted amounts every 3 or 6 months
3. Typically, how far apart are the payment dates in interest rate
Set 20: Volatility Smile
1. What is implied volatility?
2. What is historical volatility?
3. Can 2 options on the same stock, with the same maturity, but different strikes have a
different implied volatility?
4. What is the volatility smile?
5. In a graph
Set 19: Greeks 1: Delta Hedging
1. How would a quant define delta?
The rate of change of an option value relative to the change in the underlying; or the first
derivative of the graph of the option price relative to the stock price
2. How would a risk man
Set 19: Greeks 1: Delta Hedging
1. How would a quant define delta?
2. How would a risk manager define delta?
3. How would a trader define delta?
4. What are the values delta can have for a call option?
5. What are the values delta can have for a put optio
Introduction to Bloomberg
Getting Started with Bloomberg
Bloomberg is a platform designed for financial professionals that provides realtime and historical
market data, news, and analysis.
The Keyboard
Bloomberg has somewhat unique functionality that reli
Bloombergs Equity functionality
Fundamental Analysis
To get a fundamental picture of a specific company you can use the
mnemonic FA followed by <GO>. This function is a dynamic
fundamental analysis tool that displays the financial history of a specific
co
Bloombergs Equity functionality
Earnings season resources
There is a command that allows you to analyze the results of the
current earnings season for your selected list of securities. This
screen, with the shortcut mnemonic EA and <GO> examines EPS,
net
Bloombergs Equity functionality
Bloomberg's corporate event and transcript resource
After exploring the ways in which you can keep up to speed with the
news and research that affect both the broad markets and your
investments, we will turn our attention t
Bloombergs Equity functionality
Graph functionality
To continue your security-specific analysis, Bloomberg offers a wide
range of graphs. To view the historic movement of a stock you should
enter GP and <GO>. It displays historical closing prices for a se
Bloombergs Equity functionality
Bloombergs Equity functionality is vital for your daily investment analysis.
It fully integrates the very best in real-time data, news and research,
providing you with an unmatched level of market data transparency, dynamic
Bloombergs Equity functionality
Peer Group Analysis
Peer Group Analysis is a core equity functionality available under RV
<GO>. We use it to perform a customized peer group analysis so we can
benchmark our securities' performance against its peers.
This p
Bloombergs Equity functionality
Earning estimates
Additional layer to the equity functionality is provided by the earnings
estimates available under EEO and <GO>. All earnings estimates are
aggregated for a company in one place so you can quickly see the
Bloombergs Equity functionality
Equity Screening
EQS and <GO> is the Bloomberg equity screening application that
allows you to search for securities based on your defined criteria from
a broad set of underlying data. The interface used for this tool offer
Bloombergs Equity functionality
Analyst Recommendations
Another dynamic tool for analyst research is the function ANR <GO>. You
can use it to display a list of analysts' recommendations, price targets, price
target time periods and a consensus rating for