Derivative Markets and Instruments Flashcards

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1
Q

Derivatives consist of two general classes: ______ and _________.

A

forward commitments, contingent claims

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2
Q

A call is an option that provides the right to _____ the underlying.

A

buy

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3
Q

A put is an option that provides the right to ____ the underlying.

A

sell

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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

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