Test Bank Global Business by Mike Peng 6th Edition Chapter 1-15 Answers are at the End of this Document
CHAPTER 1: INTRODUCTION MULTIPLE CHOICE TEST QUESTIONS 1.
The market value of the derivatives contracts worldwide totals a. less than a trillion dollars b. in the hundreds of trillion dollars c. over a trillion dollars but less than a hundred trillion d. over quadrillion dollars e. none of the above
2.
Cash markets are also known as a. speculative markets b. spot markets c. derivative markets d. dollar markets e. none of the above
3.
A call option gives the holder a. the right to buy something b. the right to sell something c. the obligation to buy something d. the obligation to sell something e. none of the above
4.
Which of the following instruments are contracts but are not securities a. stocks b. options c. swaps d. a and b e. b and c
5.
The positive relationship between risk and return is called a. expected return b. market efficiency c. the law of one price d. arbitrage e. none of the above
6.
A transaction in which an investor holds a position in the spot market and sells a futures contract or writes a call is a. a gamble b. a speculative position c. a hedge d. a risk-free transaction e. none of the above
7.
Which of the following are advantages of derivatives? a. lower transaction costs than securities and commodities b. reveal information about expected prices and volatility c. help control risk