Essay Examination 2
These questions are from the test bank. An "A" answer requires at least three or four intelligent sentences. Some questions may require more sentences if they have multiple parts.
Lecture 7 - Currency and Commodity Derivatives
1. Please answer the following parts.
2. Please answer the following parts.
3. (a) What is the difference between a speculator and hedger?
4. (a) What is the difference between a Futures and a Forward?
5. (a) What were the problems with Collateralized Debt Obligations (CDOs) and Securitization for the U.S. mortgage market?
6. (a) What is the difference between a call and put option?
7. (a) What is securitization?
8. You are a speculator, and you want to profit from the silver market. Please use the information for all questions that the spot price of silver is $31 per ounce.
9. (a) Distinguish the Volatility Index (VIX) from a stock market index, such as the Dow Jones Industrial Average.
Lecture 8 - Market Evaluation of Derivatives
10. You may need the following equation to answer this question:
Lectures 10 - Capital Investment Decisions
11. (a) What is capital budgeting?
12. You have the following project information in a table below:
Lecture 12 - Capital Asset Pricing Model (CAPM)
13. You may use the following equation for this question: