Derivative Markets and Instruments Flashcards
1
Q
Derivatives consist of two general classes: ______ and _________.
A
forward commitments, contingent claims
2
Q
A call is an option that provides the right to _____ the underlying.
A
buy
3
Q
A put is an option that provides the right to ____ the underlying.
A
sell
4
Q
A _________ is the most widely used credit derivative. It is a derivative
contract between two parties, a credit protection buyer and a credit protection
seller, in which the buyer makes a series of payments to the seller and receives
a promise of compensation for credit losses resulting from the default of a third
party
A
credit default swap