101. Spread is __________ for IPOs.
(A) highest
(B) lowest
(C) average
(D) uncertain

102. The value of a financial derivative depends on the
(A) maturity
(B) duration
(C) forward interest rate
(D) underlying

103. Which from the following statements is incorrect?
(A) A European option can only be exercised at expiry
(B) An American option can only be exercised at expiry
(C) A European option is a right but not obligation
(D) An American option is a right but not obligation

104. An agreement on a telephone or email to buy/sell an asset at an agreed future time for an agreed price is called
(A) spot contract
(B) forward contract
(C) future contract
(D) swap

105. When forward contract is traded on an exchange, it is called
(A) spot contract
(B) future contract
(C) call option
(D) put option

106. On 1 January you enter a contract to buy 1 million barrel of oil for $80 per barrel to be delivered on 1 March. The price on 1 March is $82 per barrel. Your gain is

(A) $200
(B) $20000
(C) $200000
(D) $2000000

107. Allocating stock in popular new issues to manager of their important corporate clients is called
(A) subscription
(B) under-performance
(C) rights
(D) spinning

108. Which from the following issues has the lowest total direct cost?
(A) straight bonds
(B) corporate stocks
(C) all issues have same cost
(D) none of these

109. An option that allows the underwriter to increase the number of shares bought by 15% is called
(A) spread
(B) spinning
(C) whiteshoe
(D) greenshoe

110. A four year zero-coupon bond has 6% yield. What is its duration in years?

(A) 4
(B) 5
(C) 6
(D) 7

NOTE
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