Podcast
Questions and Answers
What are the payoffs for financial derivatives linked to?
What are the payoffs for financial derivatives linked to?
Which of the following is NOT considered a financial derivative?
Which of the following is NOT considered a financial derivative?
What is one reason to hedge a portfolio?
What is one reason to hedge a portfolio?
How is hedging risk for a long position typically accomplished?
How is hedging risk for a long position typically accomplished?
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By hedging a portfolio, what risk does a bank manager typically aim to reduce?
By hedging a portfolio, what risk does a bank manager typically aim to reduce?
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Which of the following is a characteristic of financial derivatives?
Which of the following is a characteristic of financial derivatives?
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When interest rates fall, what happens to the value of securities compared to futures contracts?
When interest rates fall, what happens to the value of securities compared to futures contracts?
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What is the purpose of hedging risk for a short position?
What is the purpose of hedging risk for a short position?
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What is a contract that requires the investor to buy securities on a future date called?
What is a contract that requires the investor to buy securities on a future date called?
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What is the hedge called when a financial institution hedges the interest-rate risk for a specific asset?
What is the hedge called when a financial institution hedges the interest-rate risk for a specific asset?
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In a long contract, what does the investor need to do in the future?
In a long contract, what does the investor need to do in the future?
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What is the term for the number of futures contracts outstanding?
What is the term for the number of futures contracts outstanding?
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What does a person agree to do when they 'go long' in an asset at a future date?
What does a person agree to do when they 'go long' in an asset at a future date?
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Which feature of futures contracts was NOT designed to increase liquidity?
Which feature of futures contracts was NOT designed to increase liquidity?
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What is required of an investor in a short contract concerning the future?
What is required of an investor in a short contract concerning the future?
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In hedging interest-rate risk on its overall portfolio, what type of hedge does a financial institution use?
In hedging interest-rate risk on its overall portfolio, what type of hedge does a financial institution use?
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Which aspect characterizes a micro hedge in financial risk management?
Which aspect characterizes a micro hedge in financial risk management?
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When a contract requires an investor to sell securities on a future date, what is it called?
When a contract requires an investor to sell securities on a future date, what is it called?
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