Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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In the derivative markets a swap is: *
A. another name for a call option.
B. another name for a put option.
C. an agreement between two or more persons to exchange cash flows over some future period.
D. the name for the exchange of a futures contract for an option contract.
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- A swap: Group of answer choices B. Gives the holder the right to see the underlying bond. A. Allows the buyer to purchase the underlying instrument. C. Is an OTC agreement to exchange the cash flows of two different securities. D. Not effective at managing interest rate risks.arrow_forwardA(n). OOO futures hedge is most likely to result in ongoing payments over the life of the foreign exchange instrument. options money market forwardarrow_forwardDefine each of the following terms: c. Financial futures; forward contractarrow_forward
- All of the statements below are true of futures contractsexcept that futures contracts: O a. result in predictable gross profits. O b. result in predictable cash flows. O c. eliminate downside risk and upside potential. O d. eliminate downside risk while allowing for upside potential.arrow_forwardAt the expiration of a futures contract, futures prices converge to __. a. Option prices b. forward prices c. market prices d. spot pricesarrow_forwardInterest Rate Swap: A company that expects interest rates to rise and wishes to exchange its floating interest rate for a fixed rate would: Select one OA. Enter into a payer swap B. Enter into a receiver swap C. Sell interest rate futures OD. Buy interest rate futuresarrow_forward
- 2arrow_forwardA contract requiring a specified future monetary payment at a specified future point in time in exchange for the delivery of a specific asset is called a: *A. nonconvertible option.B. hedge.C. long contract.D. swap.arrow_forwardWhat is the correct strategy when the asset backing the futures contract differs from the asset whose price is being hedged? O Short hedge O Long hedge O Perfect hedge O Tailing the hedge O Cross hedgearrow_forward
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