Page 164 - CAPE Financial Services Syllabus Macmillan_Neat

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8. Which of the following features is NOT associated with a commercial bank loan?

(A) Covenants
(B) Guarantees
(C) Convertibility
(D) Collateral requirements

9. Which of the following is not a derivative?

(A) Treasury bond futures
(B) Common stock
(C) Options
(D) Swaps

10. Which of the following is a derivative financial asset?

(A) A mortgage
(B) A Treasury bill
(C) Commercial paper
(D) A financial futures contract

11. Which of the following buy or sell futures contracts to reduce their exposure to the risk of
future price movements in the underlying asset?

(A) Callers
(B) Hedgers
(C) Speculators
(D) Arbitrageurs

12. What will Arbitrageurs do if the price of a futures contract is higher than the price of the
underlying security during the delivery period?

(A) buy the futures, simultaneously sell the underlying asset, and pocket the price
difference

(B) sell the futures, simultaneously buy the underlying asset, and pocket the price
difference

(C) sell the futures, simultaneously sell the underlying asset, and pocket the price
difference

(D) buy the futures, simultaneously buy the underlying asset, and pocket the price
difference

13. A standardized agreement that calls for the delivery of a specific underlying commodity
or security at a fixed date and an agreed-upon price is referred to as

(A) a swap
(B) a futures contract
(C) an option contract
(D) a forward contract

02269010/SPEC2016

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