THINGS I GOT WRONG

Question 1

Which order would protect an investor short FTSE futures?

Answer 1

Buy with an additional stop order

Question 2

Where are Norwegian futures contracts traded?

Answer 2

LSE Derivatives

Question 3

What will investors need to do when calculating the fair value of a forward?

Answer 3

Difference between current interest rates and the shares dividend yield

Question 4

What will happen to output if the marginal cost of mining moves and remains above the current price?

Answer 4

Output will stop

Question 5

How often OATs pay coupons?

Answer 5

Annually

Question 6

How can issuers of preference shares make an issue more attractive for the investor?

Answer 6

Adding possibility of conversion to ordinary shares into the issue

Question 7

What are the mot common maturities for CDs?

Answer 7

Three and six months

Question 8

What is the main reason why a company would use a non-deliverable forward?

Answer 8

Hedge an FX exposure in a currency that is not fully convertible

Question 9

Why is an ISDA master agreement important should one party to the agreement default?

Answer 9

It allows for all of the deals to be netted rather than considered separately

Question 10

A collateralised debt obligation (CDO) allows the originator to:

Answer 10

Pass credit risk onto other investors