Basics of Derivatives Chapter 1.1 Quiz

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Questions and Answers

What is a derivative?

  • A type of energy resource
  • A physical asset like Gold or Silver
  • An investment in the stock market
  • A contract or product whose value is derived from another asset (correct)

Which of the following is NOT an example of an underlying asset for derivatives?

  • Oil and Natural Gas
  • Gold and Silver (correct)
  • Cotton and Pulses
  • Shares and Bonds

What was the significant event related to derivatives in 1634-1637 in Holland?

  • Fortunes were lost after a speculative boom in tulip futures burst (correct)
  • Tulip Mania led to the boom of copper futures
  • Successful trading of gold futures
  • Introduction of coffee futures trading

Which historical event is associated with the development of a futures market in rice?

<p>Japan at Dojima, near Osaka, late 17th century (C)</p> Signup and view all the answers

What is a common feature among the milestones in the evolution of derivatives?

<p>All milestones involved contracts for future delivery (D)</p> Signup and view all the answers

What was the significance of Chicago Board Options Exchange (CBOE) in 1973?

<p>It was the first marketplace for trading listed options. (B)</p> Signup and view all the answers

Which exchange introduced the first successful pure interest rate futures in 1975?

<p>Chicago Mercantile Exchange (CME) (B)</p> Signup and view all the answers

What did the 24-member committee under the Chairmanship of Dr. L.C.Gupta recommend in 1998 regarding derivatives trading in India?

<p>Derivatives should be declared as 'securities'. (A)</p> Signup and view all the answers

Which factor helped reduce transaction costs in the global derivatives market?

<p>Use of latest technology in communications (A)</p> Signup and view all the answers

When did the CBOT introduce the T-bond futures contract?

<p>1975 (D)</p> Signup and view all the answers

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