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6. What might be achieved by a bond issuer retaining the right to repay a bond in either of two currencies at a pre-determined rate?

  • An enhanced coupon rate on the bonds that will attract investors
  • A superior credit rating for the bonds
  • Enhanced gamma

7. A strategy of buying or selling a derivative without a position in the underlying asset is:

  • Executable in the OTC market only
  • Illegal
  • Referred to as speculation
  • Considered a hedging strategy

8. What is measured by gamma?

  • The nonlinearity of an option's payoff line at one point
  • The slope of an option's payoff line at one point
  • The difference between spot and forward prices
  • The ratio of short positions to long positions