The spot price of an asset that has no interim costs or benefits will be least likely affected by:

A$.$ The risk aversion of investors.

B$.$ The time value of money.

C$.$ The price recently paid by other investors.

The value of the forward contract at expiration is equal to the:

A$.$ Price of the underlying divided by the forward price.

B$.$ Price of the underlying minus the forward price.

C$.$ Price of the underlying minus the compounded forward price.

Which of the following statements is least accurate?

A$.$ An asset backed security is a contingent claim.

B$.$ An interest rate swap is a forward commitment.

C$.$ A credit default swap is a forward commitment.

Which of the following statements is least accurate about contingent claims?

A$.$ The payoffs are not linearly related to the underlying.

B$.$ The most the short can gain is the premium paid for the contingent claim.

C$.$ Either party can default to the other.

Which of the following is best classified as a forward commitment?

A$.$ A convertible bond.

B$.$ A swap agreement.

C$.$ An asset$-$backed security.

Which of the following is not a forward commitment?

A$.$ Futures contracts.

B$.$ Interest rates swaps.

C$.$ Asset backed securities$.$

Which of the following statements is most accurate?

A$.$ Forwards are customized whereas swaps are standardized.

B$.$ Forwards are subject to daily price limits whereas swaps are not.

C$.$ Swaps have multiple payments, whereas forwards have only a single payment.

Which of the following is a characteristic of a put option on the stock?

A$.$ A guarantee that the stock price will decrease.

B$.$ A specified date on which the right to sell expires.

C$.$ A fixed price at which the put holder can buy the stock.

$3$

In which of the following contracts would the buyer face the least default risk?

A$.$ Cotton futures.

B$.$ Currency forwards.

C$.$ Over$-$the$-$counter interest rate options.