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11 Cards in this Set
- Front
- Back
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What is the definition of derivative? |
A derivative is a financial contract whose value is drived from, or depends on, the value of some other assets. |
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Which type of mutual funds are more likely to use derivatives than others? |
Index funds 10.3 |
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On which mutual fund disclosure it must state whether the fund has the latitude to use derivatives? |
Fund's prospectus |
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Canadian mutual fund regulations fall under ? |
Jurisdiction of the securities act of each province or territory |
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Securities administrators control the activities of mutual funds and their managers and distributors through which instrument? |
National instruments N.I 81 - 102 |
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Canadian mutual funds use derivatives primarily to reduce blank space . |
Exchange rate exposure 10.5 |
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What is the difference between equity fund derivatives applications and Fix income related futures? |
1. Equity fund to gain or hedge out exposure to entire equity markets Fixed income to increase or decrease exposure to interest rate risk 2. Equity fund for managing beta,
Fixed income for duration 7 . 8 |
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This incident occurs when the execution of a transaction causes subsequent prices to worsen? |
Execution slippage 10.9 |
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What is the price sensitivity of the option called? |
Delta 10.11 |
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What are the advantages of derivatives? |
Relax general manager! RELGM Risk reduction, Ease of execution, Lower costs, Greater asset selection, More portfolio income, |
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What is the most common use of derivatives for non hedging purposes? Important question |
Is to gain exposure to a market without having to own the underlying securities 10.5 |
