Securities and Derivatives MCQs and quiz

13 MCQ quiz questions on Securities and Derivatives for MBA finance students.

Instructions

Topic- Securities and Derivatives

The test consists of 13 questions.

No negative marking for this test.

No Time limit

The pass percentage is 70%

The correct answer with a description will be displayed after the answer has been marked.

Submit the test to calculate your score once you are done with all the questions.

Complexity Level- Moderate

Q1: Which of the following best describes a "security"?

A financial instrument representing ownership or debt

A type of currency

A regulatory body

A type of insurance policy

Q2: Which of the following is NOT a type of derivative?

Options

Futures

Stocks

Swaps

Q3: What does the term "underlying asset" refer to in derivatives trading?

The total value of the derivative

The asset that determines the value of the derivative

The cash flow generated by the derivative

The market for the derivative

Q4: What is the main purpose of options in trading?

To provide fixed interest income

To give investors a right, but not an obligation, to buy or sell an asset

To guarantee profits in all market conditions

To hedge against currency fluctuations

Q5: In a futures contract, what is typically agreed upon?

The current price of the underlying asset

The spot price at the time of purchase

The future delivery price and date of the underlying asset

The stock dividend rate

Q6: Which of the following best describes a "swap"?

An agreement to exchange cash flows or financial instruments

A loan with variable interest rates

A method for issuing new stocks

A government-backed security

Q7: What does "hedging" mean in the context of derivatives?

Taking on more risk

Using derivatives to offset potential losses in other investments

Reducing the potential for profit

Investing in multiple stocks

Q8: In options trading, what is the "strike price"?

The price at which the option contract is sold

The market price of the underlying asset

The price at which the underlying asset can be bought or sold

The amount paid for the option premium

Q9: What does "dividend yield" measure?

The total return on investment

The percentage of a company's earnings paid out as dividends

The ratio of stock price to earnings per share

The interest earned on bonds

Q10: What is the main function of a stock exchange?

To issue currency

To manage government debt

To provide a platform for trading stocks

To regulate interest rates

Q11: Which of the following best describes the term "liquidity" in financial markets?

The ability to earn high returns

The ease with which assets can be converted to cash

The total amount of money in circulation

The level of government intervention in markets

Q12: Which of the following is true for a future contract?

Futures have high counterparty risk over forward contrcts

Futures are traded over the counter

Futures are settled at the end of the contract

Futures are settled daily

Q13: Futures have standardized terms, while forwards are customized by the two parties.

Select True OR False:

True

False

Share the link

More Finance MCQs

Join our telegram channel

FIRST NAME:
LAST NAME:
CITY:
BACKGROUND:
INTERESTED IN:
FEEDBACK:

Vocabulary MCQ Tests:

Essential Words

Grammar

Selenium MCQ Tests:

Selenium

Testing

Securities and Derivatives MCQs and quiz