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Select from the option list provided the derivative that best matches each description below. Each choice may be used once, more than once, or not
Select from the option list provided the derivative that best matches each description below. Each choice may be used once, more than once, or not at all.
Description | Derivative |
1. It is a means of correlating the debt service burden with revenues. | |
2. It is not traded on regulated exchanges. | |
3. These instruments are marked to market daily. | |
4. The purchaser pays a premium for the opportunity to benefit from the underlying item's appreciation. | |
5. The gain is the excess of the exercise price over the market price of the underlying item. |
Are the Derivative of one through five a
Call option
Forward contract
Futures contract
interest rate swap
or Put option
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