Free Online CFA Level 1 Practice Questions-11 Multiple Choice Questions on Derivatives

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have a multiplier that is multiplied by the index to calculate the contract value, and settle in cash.

• Marking-to-market
• Stock index futures
• Currency futures
• Termination of Futures

An offsetting trade, entering into an opposite position in the same contract.Cash payment at expiration (cash-settlement contract).Delivery of the asset specified in the contract.An exchange for physicals (asset delivery off the exchange).

• Termination of Futures
• Currency futures
• Variation margin
• Stock index futures

for a face value of $100,000, give the short a choice of bonds to deliver, and use conversion factors to adjust the contract price for the bond that is delivered.

• Eurodollar futures contracts
• Marking-to-market
• Treasury bond contracts
• Call option

When margin falls below this amount, it must be brought back up to its initial level by depositing additional cash.

• Initial margin
• Marking-to-market
• Maintenance margin
• Variation margin

option's owner the right, but not the obligation, to buy a specified quantity of the asset from the option writer at the exercise price specified in the option for a given time period.

• Call option
• Initial margin
• Margin calculations
• Variation margin

for a face value of $1,000,000, are quoted as 100 minus annualized 90-day LIBOR in percent, and settle in cash.

• Eurodollar futures contracts
• Treasury bond contracts
• Currency futures
• Stock index futures

based on the daily settlement price, the average of the prices for trades during a closing period set by the exchange

• Margin calculations
• Maintenance margin
• Call option
• Marking-to-market

deposit required to initiate a futures position

• Initial margin
• Maintenance margin
• Call option
• Variation margin

for delivery of standardized amounts of foreign currency

• Call option
• Stock index futures
• Termination of Futures
• Currency futures

minimum margin amount.

• Initial margin
• Variation margin
• Maintenance margin
• Marking-to-market

--the process of adding gains to or subtracting losses from the margin account daily, based on the change in settlement prices from one day to the next. --day's gains in contract value + long's margin balance and subtracts them from the short's margin balance, or subtracts the day's loss in contract value from the long's margin balance + short's margin balance.

• Marking-to-market
• Maintenance margin
• Margin calculations
• Variation margin