5 Questions
What is the basic principle behind using a derivative product to manage an identified risk exposure?
Locking in a price today that will apply at a specified future date
What determines the price of a derivative contract?
Specified underlying commodity or financial instrument traded in the physical markets
Which of the following is a generic derivative product?
Futures
If commodity prices, interest rates, exchange rates, or share market prices move, what happens to the value of related derivative contracts?
The value of related derivative contracts also moves
What does an interest rate futures contract derive its price from?
Financial instrument such as the 90-day bank-accepted bill, or the 3-year or 10-year Australian treasury bonds
Test your knowledge of derivative products and risk management strategies with this quiz. Explore the basics of using derivatives to manage risk exposure and understand how prices are locked in for future dates. Gain insight into derivative contracts based on underlying commodities or financial instruments traded in physical markets.
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