Derivative Securities Market MCQs with Answers PDF Download – Test 54

The type of financial security whose payoff is linked to any other security is called

1. strong security
2. semi-strong security
3. derivate security
4. non-derivate security

The form of market efficiency which considers the speed with which the information at public level is impounded in the prices of stock is classified as

1. semi-strong form market efficiency
2. expensive form market efficiency
3. weak form of market efficiency
4. strong form of market efficiency

The risk arises from trading of assets because of change in asset prices and exchange rates is classified as

1. asset risk
2. trade risk
3. market risk
4. exchange risk

The Federal reserve, money market brokers and dealers, mutual funds and US treasury are all participants of

1. liquid markets
2. money markets
3. transaction markets
4. functional markets

The theory according to which the difference between expected appreciation and foreign interest must be equal to domestic interest rate, is called

1. interest rate parity theorem
2. appreciation parity theorem
3. domestic parity theorem
4. foreign interest parity theorem