CFA Domain 9: Derivative Investments

When losses on a long futures position result in a margin call, the amount due is most likely the money required to:

A European put option with an exercise price of €85 is selling for €5. At expiration, if the profit for the short position is €2, then the underlying spot price is closest to:

Which of the following best describes the maximum potential gains and losses on a short put at expiration?

On the day of expiration, a European call option with an exercise price of USD 50 has an underlying asset with a value of USD 57. If USD 2 was paid to purchase the option, the call buyer's profit is closest to:

If the credit protection buyer of a credit default swap (CDS) chooses a cash settlement after a credit event, the required payment from the credit protection seller is most likely:

All else being equal, for a one-year forward contract initiated six months ago, an increase in the storage costs of the underlying asset implies that the contract's value to the long party most likely:

A forward contract is created on a nondividend-paying stock. At contract initiation, the contract's value is most likely:

An asset has a spot price of CNY 48 and its one-year cost of carry is CNY −1.20. If the risk-free rate is 3%, the forward price of the asset is closest to:

The cash amounts due on the payment dates of a currency swap are best described as the:

"An analyst observes the following market data for one American put option: This option's moneyness is best described as:"

If interest rates are negatively correlated with futures prices, an increase in interest rate volatility most likely increases the prices of:

An investor can most closely create a synthetic short position in a 30-day forward rate agreement (FRA) on 60-day LIBOR by simultaneously:

The named third party of a credit default swap suffers a credit event that results in payment to the credit protection buyer. The event is least likely to be which of the following?

Which of the following forward commitments is least likely to expose investors to default?

Which of the following instruments is least likely to be classified as a contingent claim?

On the day of expiration, a European put option's underlying asset has a price of GBP 83. The option's exercise price is GBP 76, and the put buyer paid GBP 3 to purchase the option. The payoff to the put buyer is closest to:

An investor sells a European put with a strike price of EUR 100 for EUR 5. At expiration, the underlying stock is trading at EUR 90. Based only on this information, the investor's profit (in EUR) is closest to:

An increase in the risk-free interest rate is most likely to cause the arbitrage-free value of European equity put option to:

An asset has a one-year forward price of £98, and its one-year cost of carry has a present value of £2.25. If the risk-free rate is 2%, the current arbitrage-free spot price of the asset is closest to:

An investor sells a European call for GBP 3 with a strike price of GBP 50. Based only on this information, which of the following best describes the investor's loss potential?