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CMSA (DERIVATIVE FUNDAMENTALS) EXAM QUESTIONS AND GUARANTEED CORRECT ANSWERS LATEST UPDATE 2024/2025 CA$16.64   Add to cart

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CMSA (DERIVATIVE FUNDAMENTALS) EXAM QUESTIONS AND GUARANTEED CORRECT ANSWERS LATEST UPDATE 2024/2025

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CMSA (DERIVATIVE FUNDAMENTALS) EXAM QUESTIONS AND GUARANTEED CORRECT ANSWERS LATEST UPDATE 2024/2025 Define Derivative Market A market developed over time to transfer risk from one part to another Define a Long Position The position that benefits when the underlying increases in value Define...

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  • September 28, 2024
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  • 2024/2025
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CMSA (DERIVATIVE FUNDAMENTALS) EXAM QUESTIONS

AND GUARANTEED CORRECT ANSWERS LATEST UPDATE

2024/2025


Define Derivative Market


A market developed over time to transfer risk from one part to another


Define a Long Position


The position that benefits when the underlying increases in value


Define Short position


The position that benefits when the underlying decreases in value


What are the two uses for derivatives?


1. Hedging - Protecting a financial position from loss

2. Speculating - Trying to make guesses about the direction of the underlying asset's value to make a

profit


What are the four derivative categories


1. Forwards

2. Futures

3. Swaps

4. Options

, What are the components of a forward contract


1. Underlying Asset

2. Delivery Date

3. Specified Price

4. Quantity

5. Type of Delivery


Define Futures Contract


A futures contract is similar to a forwards contract. It is an agreement t exchange an underlying asset for

a pre-specified price at a specified date in the future


What makes a futures contract different from a forward contract?


1. Futures are standardized forwards are not

2. Futures are traded on exchanges forwards are traded on OTC

3. Futures require margin and can be margin called

4. Futures are settled daily


What are the 7 components to a Futures Contract?


1. Underlying asset

2. Delivery date

3. Specified price

4. Contract size

5. Type of delivery

6. Tick size - Minimum increments the price will move

7. Initial margin & maintenance margin

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