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Free CTP Exam Braindumps (page: 38)

Page 37 of 234
PDF with 932 Questions

An airline wants to lock in the price of the jet fuel it needs to purchase to satisfy the peak in-season demand for travel. The airline wants to manage its exposure to fluctuations in fuel prices. What type of exposure is this?

  1. Translation
  2. Delivery
  3. Commodity
  4. Speculative

Answer(s): C



The exchange of a fixed interest rate cash flow for a floating interest rate cash flow with both interest rates in the same currency is an example of:

  1. a vanilla swap.
  2. an interest rate option.
  3. a basis-rate swap.
  4. an interest rate cap.

Answer(s): A



A company with a relatively poor credit rating borrows most of its funds with short maturities. They may want to change its exposure to interest rates to more correctly reflect the long-term nature of the projects it is funding. Or, they may believe that long-term interest rates are going to rise, causing it to seek protection against the impact of higher interest rates on its balance sheet. Which of the following would be a solution?

  1. Forward contract
  2. Interest rate swap
  3. Currency option
  4. Futures contract

Answer(s): B



A put option gives the holder the right to:

  1. buy the underlying stock at the strike price.
  2. sell the underlying stock at the strike price.
  3. sell short shares of the underlying stock at the strike price.
  4. buy long shares of the underlying stock at the strike price.

Answer(s): B






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