Free PRMIA 8013 Exam Questions

Become PRMIA Certified with updated 8013 exam questions and correct answers

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Total 290 Questions | Updated On: Nov 27, 2024

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Question 1

An early exercise of an American call option is advisable whenever the option is deep in the money and delta approaches 1

A : An early exercise of an American call option is advisable whenever the option is deep in the money and delta approaches 1

B : An early exercise of an American call option may be justified if an extraordinarily large dividend payment is imminent

C : An early exercise of an American call option is never a good idea as an option is always worth more alive than when it is dead

D : An early exercise of an American option, if ever to be done, should be done immediately after an exdividend date

Answer: B

Question 2

For a forward contract on a commodity, an increase in carrying costs (all other factors remaining constant) has the effect of:

A : increasing the forward price

B : decreasing the forward price

C : increasing the spot price

D : decreasing the spot price

Answer: A

Question 3

The two components of risk in a commodities futures portfolio are:

A : Changes in the convenience yield and storage costs

B : Changes in spot prices and carrying costs, also called commodity lease rates

C : Changes in interest rates and spot prices

D : The risk from change in basis and interest rates

Answer: B

Question 4

If interest rates and spot prices stay the same, an increase in the value of a call option will be accompanied by:

A : a decrease in the value of the corresponding put option

B : an indeterminate change in the value of the corresponding put option

C : an increase in the value of the corresponding put option

D : no impact in the value of the corresponding put option

Answer: C

Question 5

If zero rates with continuous compounding for 4 and 5 years are 4% and 5% respectively, what is the forward rate for year 5?

A : 5%

B : 9%

C : 9.097%

D : 7%

Answer: B

Page: 1 / 58

Total 290 Questions | Updated On: Nov 27, 2024

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