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Futures & Options Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. What is a put option?

Question 2 2. Sarah has purchased a call option for stock ABC for 100 shares at $3.20 per share with an expiration date of 60 days. At which of the following market prices for her ABC stock should she exercise her call option?

Question 3 3. What is a call option?

Question 4 4. John has purchased a put option for stock XYZ for 100 shares at $13.38 per share with an expiration date of 30 days. At which of the following market prices for stock XYZ should John exercise his put option? John has purchased his XYZ stock for $10.00 per share.

Question 5 5. What is an option?

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Question 6 6. Suppose Party A and Party B enter into a forward contract in which Party A sells 100 cows to Party B on a cash settlement basis for $100. If the market price of 100 cows on the settlement date is $105, what does Party B owe Party A on the settlement date?

Question 7 7. A contract made on a delivery basis will require the seller to supply _____ to the buyer on the settlement date.

Question 8 8. When an investor enters into a contract to reduce the risk of loss in another transaction, this is called _____.

Question 9 9. The increase in international trade has created an enormous market for hedging with forward contracts for the purpose of minimizing _____.

Question 10 10. What is a forward contract?

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Question 11 11. Which of these is a qualification of an accredited hedge fund investor?

Question 12 12. Hedge fund investors are formally known as:

Question 13 13. Which of the following best describes emerging markets strategies?

Question 14 14. The difference between a hedge fund and a mutual fund is:

Question 15 15. Which statement most accurately describes part of the hedge fund structure?

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Question 16 16. What is the term for the 'something else' that determines the price of a derivative?

Question 17 17. What is true about futures contracts settlement?

Question 18 18. What is a derivative?

Question 19 19. What is the term used when a company, or individual, uses futures contracts, or other derivatives, to protect against rising prices?

Question 20 20. Which of the following are required for a futures contract to exist?

Futures & Options Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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