A derivative is a security with payoffs Tied lo increased profitability Tied to

Question

A derivative is a security with payoffs Tied lo increased profitability Tied to other asset prices Tied to always increasing stock markets Tied directly to interest rote fluctuations The "strike " price of an option is The price which renders the option worthless The price an option holder agrees to pay for the security The pro lit an investor makes by exercising the option The difference between profit and the security price If an investor's time horizon is short then Site should buy more stocks She should buy more bonds She should buy more stock based mutual funds She should buy more stock based Index mutual funds Since stocks are more volatile than bonds, there is a trade-off between Risk and return Profit and return Profit and costs None of the above The original purpose of Hedging (NOT Hedge Funds) by investors was focused on Speculation with securities Balance risks related to financial assets Minimize profitability All of the above The Optimal Capital Structure of a firm corresponds to Bonds to issue for financing the company operations Stocks to issue for financing the company operations Minimizing the cost of firm financing All of the above NASDAQ trading Apple shares is an example of Primary market Secondary market Commodities market Agricultural market The types of loans that have grown in importance tor banks in the last 20 years Residential real estate loans Commercial real estate loans Credit card lending All of the above

Explanation / Answer

8.Ans:b

9.Ans:B.The price an option holder agrees to pay for the security

10.Ans:c

11.A

12.D

13.c

14.B

15.D

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