Which of the following is/are method(s) of risk reduction?

• A) Culture change
• B) All of the given options are correct
• C) Pulling out of a market
• D) Process change

Which of the following options strategies is best for profit-taking in case of higher volatility in prices in future?

• A) Collar strategy
• B) Butterfly strategy
• C) Bear spread strategy
• D) Straddle strategy

Which of the following is a potential factor that impacts the value of convertible bonds?

• A) Variance of prices of underlying security
• B) Changes in interest rates
• C) Conversion ratio of convertible bonds
• D) All of the given options

Which of the following institutions regulate and supervise financial institutions entering into derivative transactions?

• A) Pakistan Stock Exchange
• B) National Bank of Pakistan
• C) State Bank of Pakistan
• D) Federal Board of Revenue

Which of the following statement is not correct regarding warrants?

• A) Warrants give the right to sell a security are known as call warrants.
• B) Warrants give the right to buy a security are known as put warrants.
• C) Warrants pay dividends or come with voting rights.
• D) All of the given options

Which of the following scale tells us about the order and exact difference between the values?

• A) Ordinal scale
• B) Interval scale
• C) None of the given option is correct
• D) Nominal scales

All of the following are the measures of central tendencey, EXCEPT.

• A) Mean
• B) Standard Deviation
• C) Mode
• D) Median

Which one of the following swaptions is receiver swaption and gives a right to the holder?

• A) A put swaption
• B) A call swap
• C) A put swap
• D) A call swaption

A put option will be "Out of Money "if:

• A) The current price of the underlying assets is double to strike price
• B) The current price of the underlying assets < strike price
• C) The current price of the underlying assets is equal to strike price
• D) The current price of the underlying assets > strike price

When volatility in foreign currency affects a business's competitiveness, such risk will be classified as:

• A) Transaction Exposure
• B) Hedging Exposure
• C) Economic Exposure
• D) Translation Exposure

Which of the following statement accurately describes options?

• A) Seller could incur substantial losses, but the maximum gain is the premium paid by buyer
• B) All of the given statements are correct
• C) The maximum loss for the buyer of the options is premium paid
• D) In options, upside potential is greater than the downside risk

A ___________ means that returns of two securities move in the same direction.

• A) No correlation
• B) Positive correlation
• C) Zero correlation
• D) Negative correlation

In risk matrix, which of the following is termed as “ALARP area: As Low As Reasonably Practicable”?

• A) Black
• B) Green
• C) Red
• D) Yellow

The slope of capital market line is referred as:

• A) Reward-to-variability ratio
• B) Treynor ratio
• C) Debt to equity ratio
• D) Current ratio

Which of the following statements is TRUE about unsystematic risk of a specific security?

• A) It cannot be diversified away
• B) It depends on market volatility
• C) It results from factors unique to the firm
• D) It is likely to be higher when there is boom in economy

Which of the following is/are the types of measurement scales?

• A) Ordinal scale
• B) All of the given options are correct
• C) Nominal scale
• D) Interval scale