TEST BANK
Fundamentals of Futures and Options Markets
John C. Hull
────────────────────────────────────────────────────
M
9th Global Edition
ED
GE
EK
TEST BANK
©
20
26
?
, TABLE OF CONTENTS
Test Bank: Fundamentals of Futures and Options Markets, 9th Global Edition
By John C. Hull
CHAPTER 1 Introduction
CHAPTER 2 Futures Markets and Central Counterparties
M
CHAPTER 3 Hedging Strategies Using Futures
CHAPTER 4 Interest Rates
CHAPTER 5 Determination of Forward and Futures Prices
ED
CHAPTER 6 Interest Rate Futures
CHAPTER 7 Swaps
CHAPTER 8 Securitization and the Credit Crisis of 2007
CHAPTER 9 Mechanics of Options Markets
GE
CHAPTER 10 Properties of Stock Options
CHAPTER 11 Trading Strategies Involving Options
CHAPTER 12 Introduction to Binomial Trees
CHAPTER 13 Valuing Stock Options: The Black–Scholes–Merton Model
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CHAPTER 14 Employee Stock Options
CHAPTER 15 Options on Stock Indices and Currencies
CHAPTER 16 Futures Options and Black's Model
CHAPTER 17 The Greek Letters
©
CHAPTER 18 Binomial Trees in Practice
CHAPTER 19 Volatility Smiles
CHAPTER 20 Value at Risk and Expected Shortfall
20
CHAPTER 21 Interest Rate Options
CHAPTER 22 Exotic Options and Other Nonstandard Products
CHAPTER 23 Credit Derivatives
CHAPTER 24 Weather, Energy, and Insurance Derivatives
26
CHAPTER 25 Derivatives Mishaps and What We Can Learn from Them
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, Hull: Fundamentals of Futures and Options Markets, Ninth Edition, Global Edition
Chapter 1: Introduction
Multiple Choice Test Bank
1. A one-year forward contract is an agreement where
A. One side has the right to buy an asset for a certain price in one year’s time.
B. One side has the obligation to buy an asset for a certain price in one year’s time.
M
C. One side has the obligation to buy an asset for a certain price at some time during the
next year.
D. One side has the obligation to buy an asset for the market price in one year’s time.
ED
Answer: B
2. Which of the following is NOT true
G
A. When a CBOE call option on IBM is exercised, IBM issues more stock
B. An American option can be exercised at any time during its life
C. An call option will always be exercised at maturity if the underlying asset price is greater
EE
than the strike price
D. A put option will always be exercised at maturity if the strike price is greater than the
underlying asset price.
Answer: A
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3. A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on
the stock with a strike price of $30 costs $4. Suppose that a trader buys two call options and one
put option. The breakeven stock price above which the trader makes a profit is
A. $35
B. $40
20
C. $30
D. $36
Answer: A
26
4. A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on
the stock with a strike price of $30 costs $4. Suppose that a trader buys two call options and one
put option. The breakeven stock price below which the trader makes a profit is
A. $25
?
B. $28
C. $26
D. $20
Answer: D
, 5. Which of the following is approximately true when size is measured in terms of the underlying
principal amounts or value of the underlying assets
A. The exchange-traded market is twice as big as the over-the-counter market.
B. The over-the-counter market is twice as big as the exchange-traded market.
C. The exchange-traded market is ten times as big as the over-the-counter market.
D. The over-the-counter market is ten times as big as the exchange-traded market.
Answer: D
M
6. Which of the following best describes the term “spot price”
ED
A. The price for immediate delivery
B. The price for delivery at a future time
C. The price of an asset that has been damaged
D. The price of renting an asset
G
Answer: A
7. Which of the following is true about a long forward contract
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A. The contract becomes more valuable as the price of the asset declines
B. The contract becomes more valuable as the price of the asset rises
C. The contract is worth zero if the price of the asset declines after the contract has been
entered into
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D. The contract is worth zero if the price of the asset rises after the contract has been
entered into
Answer: B
8. An investor sells a futures contract an asset when the futures price is $1,500. Each contract is on
20
100 units of the asset. The contract is closed out when the futures price is $1,540. Which of the
following is true
A. The investor has made a gain of $4,000
B. The investor has made a loss of $4,000
26
C. The investor has made a gain of $2,000
D. The investor has made a loss of $2,000
Answer: B
?
Fundamentals of Futures and Options Markets
John C. Hull
────────────────────────────────────────────────────
M
9th Global Edition
ED
GE
EK
TEST BANK
©
20
26
?
, TABLE OF CONTENTS
Test Bank: Fundamentals of Futures and Options Markets, 9th Global Edition
By John C. Hull
CHAPTER 1 Introduction
CHAPTER 2 Futures Markets and Central Counterparties
M
CHAPTER 3 Hedging Strategies Using Futures
CHAPTER 4 Interest Rates
CHAPTER 5 Determination of Forward and Futures Prices
ED
CHAPTER 6 Interest Rate Futures
CHAPTER 7 Swaps
CHAPTER 8 Securitization and the Credit Crisis of 2007
CHAPTER 9 Mechanics of Options Markets
GE
CHAPTER 10 Properties of Stock Options
CHAPTER 11 Trading Strategies Involving Options
CHAPTER 12 Introduction to Binomial Trees
CHAPTER 13 Valuing Stock Options: The Black–Scholes–Merton Model
EK
CHAPTER 14 Employee Stock Options
CHAPTER 15 Options on Stock Indices and Currencies
CHAPTER 16 Futures Options and Black's Model
CHAPTER 17 The Greek Letters
©
CHAPTER 18 Binomial Trees in Practice
CHAPTER 19 Volatility Smiles
CHAPTER 20 Value at Risk and Expected Shortfall
20
CHAPTER 21 Interest Rate Options
CHAPTER 22 Exotic Options and Other Nonstandard Products
CHAPTER 23 Credit Derivatives
CHAPTER 24 Weather, Energy, and Insurance Derivatives
26
CHAPTER 25 Derivatives Mishaps and What We Can Learn from Them
?
, Hull: Fundamentals of Futures and Options Markets, Ninth Edition, Global Edition
Chapter 1: Introduction
Multiple Choice Test Bank
1. A one-year forward contract is an agreement where
A. One side has the right to buy an asset for a certain price in one year’s time.
B. One side has the obligation to buy an asset for a certain price in one year’s time.
M
C. One side has the obligation to buy an asset for a certain price at some time during the
next year.
D. One side has the obligation to buy an asset for the market price in one year’s time.
ED
Answer: B
2. Which of the following is NOT true
G
A. When a CBOE call option on IBM is exercised, IBM issues more stock
B. An American option can be exercised at any time during its life
C. An call option will always be exercised at maturity if the underlying asset price is greater
EE
than the strike price
D. A put option will always be exercised at maturity if the strike price is greater than the
underlying asset price.
Answer: A
K©
3. A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on
the stock with a strike price of $30 costs $4. Suppose that a trader buys two call options and one
put option. The breakeven stock price above which the trader makes a profit is
A. $35
B. $40
20
C. $30
D. $36
Answer: A
26
4. A one-year call option on a stock with a strike price of $30 costs $3; a one-year put option on
the stock with a strike price of $30 costs $4. Suppose that a trader buys two call options and one
put option. The breakeven stock price below which the trader makes a profit is
A. $25
?
B. $28
C. $26
D. $20
Answer: D
, 5. Which of the following is approximately true when size is measured in terms of the underlying
principal amounts or value of the underlying assets
A. The exchange-traded market is twice as big as the over-the-counter market.
B. The over-the-counter market is twice as big as the exchange-traded market.
C. The exchange-traded market is ten times as big as the over-the-counter market.
D. The over-the-counter market is ten times as big as the exchange-traded market.
Answer: D
M
6. Which of the following best describes the term “spot price”
ED
A. The price for immediate delivery
B. The price for delivery at a future time
C. The price of an asset that has been damaged
D. The price of renting an asset
G
Answer: A
7. Which of the following is true about a long forward contract
EE
A. The contract becomes more valuable as the price of the asset declines
B. The contract becomes more valuable as the price of the asset rises
C. The contract is worth zero if the price of the asset declines after the contract has been
entered into
K©
D. The contract is worth zero if the price of the asset rises after the contract has been
entered into
Answer: B
8. An investor sells a futures contract an asset when the futures price is $1,500. Each contract is on
20
100 units of the asset. The contract is closed out when the futures price is $1,540. Which of the
following is true
A. The investor has made a gain of $4,000
B. The investor has made a loss of $4,000
26
C. The investor has made a gain of $2,000
D. The investor has made a loss of $2,000
Answer: B
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