Problem

1. What is a characteristic of a forward contract?a Traded on an exchangeb Negotiated with...

1. What is a characteristic of a forward contract?

a Traded on an exchange

b Negotiated with a counterparty

c Covers a stream of future payments

d Must be settled daily


2. What is a characteristic of a swap?

a Traded on an exchange

b Only interest rates can be the underlying

c Covers a stream of future payments

d Must be settled daily


3. What is a characteristic of a futures contract?

a Gives the holder the right but not the obligation to buy or sell

b Negotiated with a counterparty

c Covers a stream of future payments

d Must be settled daily


4. What is a characteristic of a option?

a Gives the holder the right but not the obligation to buy or sell

b Negotiated with a counterparty

c Covers a stream of future payments

d Must be settled daily

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Solutions For Problems in Chapter 12