1. Which of the following is not a derivative?
A contract to purchase shares of Infosys, a technology company, at a fixed
An asset-backed security.
A global equity mutual fund.
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2. Which of the following statements is most likely to be correct about
A derivative is a financial instrument that derives its value based on the
performance of the underlying.
Derivatives are standardized financial instruments and cannot be
The performance of a derivative is derived by replicating the performance
of the underlying.
3. Which of the following statements about derivatives is least accurate?
They derive their value from an underlying.
They have low degrees of leverage.
They involve two parties – a buyer and a seller.
4. Which of the following statements about derivatives is not true?
They are used for risk management.
They are created in the form of legal contracts.
They are created in the spot market.
5. Which of the following statements about exchange-traded derivatives is least
They are more transparent than over-the-counter derivatives.
All terms of the contract except the price are standardized.
They have more credit risk than over-the-counter derivatives.
UGC NET PAPER 1
UGC NET Management
UGC NET COMPUTER SCIENCE
UGC NET COMMERCE
GATE COMPUTER SCIENCE
CFA Level 1
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