Derivatives - Derivatives Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Derivatives>>Derivatives Section 1

11. Which of the following is not a forward commitment?

  • Option : C
  • Explanation : An asset-backed security is a contingent claim not a forward commitment.
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13. Which of the following is best classified as a forward commitment?

  • Option : B
  • Explanation : A swap agreement is equivalent to a series of forward agreements, which are described as forward commitments.
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15. Which of the following statements is most accurate?

  • Option : C
  • Explanation : A swap is a series of multiple payments at scheduled dates, whereas a forward has only one payment, made at its expiration date.
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