Derivatives - Markets

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What asset is delivered against 90-day SOFR futures contracts?
Nothing is delivered – they are cash-settled contracts
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Why would a callable bond issuer call back the bonds?
To avail of the opportunity to refinance at a cheaper rate
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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
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What is measured by gamma?
The nonlinearity of an option's payoff line at one point
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Why might a forward or futures price be higher than the spot price for the same asset?
To compensate the seller for continuing to bear the costs of ownership
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What advantage can some derivatives present over the cash underlying as a vehicle for a short position?
They do not rely on a facility to borrow the underlying
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A strategy of buying or selling a derivative without a position in the underlying asset is:
Referred to as speculation
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Other cards in this set

Card 2

Front

Why would a callable bond issuer call back the bonds?

Back

To avail of the opportunity to refinance at a cheaper rate

Card 3

Front

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?

Back

Preview of the front of card 3

Card 4

Front

What is measured by gamma?

Back

Preview of the front of card 4

Card 5

Front

Why might a forward or futures price be higher than the spot price for the same asset?

Back

Preview of the front of card 5
View more cards

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