PRMIA Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition - 8006 Free Exam Questions

A. The spot price of the asset and the market's prevailing view of the commodity's direction in the future

B. the spot price, the risk-free rate, carrying costs and any other cash flows from holding the asset

C. the spot price, the risk-free rate, carrying costs, any other cash flows from holding the asset and the volatility of spot prices

D. the spot price, the risk-free rate, carrying costs, any other cash flows from holding the asset and the time to maturity of the forward contract

A. 1.4079

B. 1.4495

C. 0.6899

D. 0.7103

A. II and IV

B. I, II and IV

C. I, III and IV

D. I, II and III

A. An annualized forward premium of 27 basis points and a swap rate of 30 points

B. An annualized forward discount of 30 basis points and a swap rate of 27 points

C. An annualized forward discount of 27 basis points and a swap rate of 30 points

D. An annualized forward premium of 30 basis points and a swap rate of 27 points

A. generally yield less than non-callable bonds due to the call feature

B. are generally called when their prices have fallen below the issuance price

C. need to be priced lower than non-callable bonds to make them attractive to investors

D. are more convex than their non-callable counterparts

A. Delta approaches 1 and gamma approaches

B. Delta approaches 1 and gamma approaches 1

C. Delta approaches 1 and gamma approaches 0

D. Delta approaches 0 and gamma approaches 1

A. In store

B. Free on board

C. Cost, insurance and freight

D. Free alongside ship

A. Volatility of the underlying and the risk free interest rate is constant

B. There are no transaction costs

C. There is no credit risk

D. The option can be exercised at any time up to expiry

A. 1

B. 0.81

C. 1.2345

D. 0.9

A. In the event of the prices of the underlying falling, the losses of the holder of the covered call are reduced to the extent of the premium earned

B. A covered call is intended to benefit from stock prices not rising

C. A covered call is a position that includes a long stock position combined with a short call

D. The holder of a covered call theoretically faces unlimited losses in the event of a rise in the price of the underlying

A. 25 years

B. 20 years

C. Infinity

D. 5 years

A. 0

B. 1

C. Futures contracts do not have a delta as they are not options

D. e^(rt)