TRUE/FALSE QUESTIONS

5. Maturities on commercial paper are usually longer than 9 months, the average being between 4 to 6 months. (1 mark) 6. Commercial paper is an unsecured loan; the yield earned by the owner of commercial paper is similar to the rate of return earned by the owner of certificate of deposit. (1 mark) 7. Forwards are customized contracts between two parties to carry out a transaction at a future date and a price determined in the future. (1 mark) 8. One of the main players in derivatives market are speculators. They are players who establish positions based on their expectations of future price movements. (1 mark) 9. Arbitrageurs are players whose objective is to profit from pricing differentials or mispricing. (1 mark)