Free CFE Exam Braindumps (page: 28)

Page 28 of 105

A swap is an agreement between two or more parties to exchange payments based on the performance of underlying interests.

  1. True
  2. False

Answer(s): A



An agreement (other than a future) to exchange, at a specified future date and price, underlying interests is called:

  1. Present
  2. Forward
  3. Foreign
  4. None of the above

Answer(s): B



A futures contract is an agreement traded on an exchange or contract market to buy, sell, or effect cash settlement based on the performance of an underlying interest.

  1. True
  2. False

Answer(s): A



Which of the following is Correct?

  1. The insurance company transfers to the seller of a call option the opportunity for capital loss-if the stock rises by an amount exceeding the exercise price, plus the cost of the option (premium).
  2. The insurance company transfers to the buyer of a call option the opportunity for capital gain-if the stock rises by an amount exceeding the exercise price, plus the cost of the option (premium).
  3. The insurance company transfers to the seller of a call option the opportunity for capital loss-if the stock decreases by an amount exceeding the exercise price, plus the cost of the option (premium).
  4. The insurance company transfers to the buyer of a floor option the opportunity for option gain-if the stock rises by an amount exceeding the exercise price, plus the cost of the option (premium).

Answer(s): B



Page 28 of 105



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sena commented on May 31, 2019
I will see if this helps
TURKEY
upvote