Money Banking and the Financial System 3E - Hubbard - TB chapter 7

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1、Money,Banking,andtheFinancialSystem,3e(Hubbard/O'Brien)Chapter7DerivativesandDerivativeMarkets7.1Derivatives,Hedging,andSpeculating1)Inderivativemarkets,tradetakesplaceinA)assetssuchasbondsorcommonstockthatderivetheirvaluefromthevalueofthecompanieswhichiss

2、uethem.B)assetswhoseratesofreturnsmustbederivedfrominformationpublishedinfinancialtables.C)assetsthatderivetheirvaluefromunderlyingassets.D)assetswhicharenotallowedtobetradedonorganizedexchanges.Answer:CDiff:1PageRef:212Topic:derivativesObjective:Explainwh

3、atderivativesareanddistinguishbetweenusingthemtohedgeandusingthemtospeculate*:RecurringAACSB:ReflectiveThinking2)DerivativeinstrumentsareA)assetssuchasbondsorcommonstockthatderivetheirvaluefromthevalueofthecompanieswhichissuethem.B)assetswhoseratesofreturn

4、smustbederivedfrominformationpublishedinfinancialtables.C)assetswhichderivetheirvaluefromunderlyingassets.D)computerswhichdisplayreal-timefinancialinformation.Answer:CDiff:1PageRef:212Topic:derivativesObjective:Explainwhatderivativesareanddistinguishbetwee

5、nusingthemtohedgeandusingthemtospeculate*:RecurringAACSB:ReflectiveThinking3)WhichofthefollowingisNOTabenefitofderivatives?A)risksharingB)guaranteedminimumprofitC)liquidityD)informationservicesAnswer:BDiff:2PageRef:213Topic:derivativesObjective:Explainwhat

6、derivativesareanddistinguishbetweenusingthemtohedgeandusingthemtospeculate*:RecurringAACSB:ReflectiveThinking40Copyright©2018PearsonEducation,Inc.4)Supposeyouareamanagerforacompanythatproducesgrapejelly.Whichofthefollowingisthebestwayforyoutoreduceyourrisk

7、?A)acquireaderivativethatincreasesinvalueifgrapepricesincreaseB)acquireaderivativethatincreasesinvalueifgrapejellypricesincreaseC)selladerivativethatincreasesinvalueifgrapepricesincreaseD)selladerivativethatincreasesinvalueifgrapejellypricesincreaseAnswer:

8、ADiff:2PageRef:213Topic:hedgingObjective:Explainwhatderivativesareanddistinguishbetweenusingthemtohedgeandusingthemtospeculate*:RecurringAACSB:AnalyticalThinking5)ThemostimportantderivativeinstrumentsareA)fut