Which of the following is/are true about the current market value of a derivative instrument?     On maturity, it coincides with the payoff   It is always positive, so that when you buy a derivative, you always pay some amount   At the time of establishing the position, market value can be positive, negative or zero   Notional is positively related to the magnitude of the market value, unless the latter is zero   None of the other choices

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Q: 21 Which one of the following best describes the purpose of derivatives markets? Multiple Choice…

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Q: Which of these will increase the value of a call option? I. An increase in the market value of the…

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A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: The premium on a put option is primarily a function of the difference in spot price S relative to…

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Q: After paying the initial margin, a futures investor does not have to pay any additional money until…

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Q: a) Let VK(t, T) be the value of a forward contract on an asset with delivery price K, VK(t, T) =…

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Q: If spot price falls below the exercise price, seller of a futures contract makes a ______ while…

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Q: nvestors choose deri tives

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Q: 3. Why is the initial value of a futures contract zero? a. impossible to tell b. the futures…

A: Answer:- c. You do not pay anything for it. EXPLANATION:- A futures contract is an agreement between…

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Q: One can use Black-Scholes model to price any financial derivatives. true or false

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A: All of the options are incorrect.

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