Professional Documents
Culture Documents
When the strike price of an option equals the price of the underlying, what
value is at its maximum?
Select one:
a. Intrinsic Value
b. All
c. Price of the option
d. lime value
The measure of the sensitivity of option price to the changes in the interest
rate is represented by?
Select one:
a. Theta
b. Gamma
c. Delta
d. Rho
With increase in Spot Price, the value of call price and put price _
Select one:
a. Increases, Decreases
b. Decreases, Increases
c. Remains Constant, Increases
d. Decreases, Remains Constant
It is the amount of capital that banks and insurance companies set aside as a
buffer against potential losses from their business activities?
Select one
a Provision
b Economic Capital
c. None of them
d Minimum Capital Requirement
It is the amount of capital that banks and insurance companies set aside as a
buffer against potential losses from their business activities?
Select one:
a Economic capital
b Minimum Capital Requirement
c Provision
d. None
----- of outstanding options (those that are not settled yet) is the probability
that they will be in the money?
Select one
b. the government fixes the maximum rate that can be paid on bonds
c. the government fixes the maximum rate that can be paid on bonds.
d. they pay a fixed amount at maturity.
In a put swaption
Select one
a Buyer has the right to enter into a swap as a floating rate payer
b. Seller has the right to enter into a swap as a floating rate payer
c Seller has the right to enter into a swap as a fixed rate payer
d Buyer has the right to enter into a swap as a fixed rate payer
These are benchmark short-term interest rates that are widely quoted in the
marketplace?
Select one
a Repo Rate
b Euro rate
c Libor
d. Reverse Repo Rate
With increase in Spot Price the value of call price __ and put price _
Select one
a Decreases Increases
b. Remains Constant, Increases
c Decreases Remains Constant
d Increases Decreases
The capital that bank must hold In BIA for operational risk is equal to the
average of a fixed percentage of positive over the previous three years?
Select one
a None of the options
b Gross National Income
c Gross Domestic Product
d Annual Gross Income
Margins are compulsory on?
Select one:
a. Futures
b. Forwards
c. Swaps
d. Equities
Systematic Risk can be avoided?
Select one:
a. True
b False
d. A and B
An interest rate floor in currency swaps sets .
Select one
a. a maximum rate on fixed interest rate payments
b a maximum rate on floating interest rate payments
c a minimum rate on floating interest rate payments
d. None of the above
In order to develop capability to actively manage credit portfolio, banks must
have in place the following Q) they to maintain necessary data on defaults of borrowers rating category
wise
(II) they must have a Credit Rating Model
Select one.
a Only (ii) is required
b None of the options
e Only (i) is required
d Both (i) and (ii) are required
A coupon bond is a bond that ?
Select one
a always sells at par
b does not pay interest on a regular basis but pays a lump sum at maturity
e pays interest on a regular basis (typically every six months)
d can always be converted into a specific number of shares of common stock
in the issuing company
Swaps do not?
Select one
a Create Synthetic Assets
b Fluctuate interest rates
c. Help hedging
d. Decrease cost of financing
Duration and Convexity are both used extensively in?
Select one
a Risk Management
b. Risk Calculation
c Time management
d Asset liability Management
A seller pays the difference between the market rates and the cap rate when
the market rates move above the cap rate to the purchaser
Select one:
a. True
b. False