CDV — Certificate in Derivatives Derivative Practice Questions
The free CDV — Certificate in Derivatives questions that deal with derivative, with answers and explanations. The full bank and the timed practice test cover every topic the exam asks about.
Question #3
During a volatile market, which derivative might be less risky compared to others?
Correct answer: A
Explanation
Index options can diversify risks as they are based on a basket of stocks rather than a single stock.
Question #10
A company entered into a derivatives contract to manage the risk associated with fluctuating fuel prices. What type of derivative did they likely choose?
Correct answer: C
Explanation
A commodity option is specifically designed to hedge against price fluctuations in commodity markets, such as fuel prices.
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