AFP CTP - Certified Treasury Professional Exam
Page: 2 / 187
Total 932 questions
Question #6 (Topic: Topic 1)
A put option on a company's stock has an exercise price of $20. On the delivery date, the
stock is trading at $24 per share. What should the investor who has paid $2 for the option
do?
stock is trading at $24 per share. What should the investor who has paid $2 for the option
do?
A. Not exercise the option and lose $2.
B. Not exercise the option and lose $6.
C. Exercise the option and gain $2.
D. Exercise the option and gain $4.
Answer: A
Question #7 (Topic: Topic 1)
A call option for a company has an exercise price of $50. The stock is currently trading at
$60. At maturity, what should an investor who paid $3 for the option do?
$60. At maturity, what should an investor who paid $3 for the option do?
A. Exercise the option and gain $7.
B. Exercise the option and gain $10.
C. Not exercise the option and lose $3.
D. Not exercise the option and lose $13.
Answer: A
Question #8 (Topic: Topic 1)
In a typical swap transaction, two parties agree to exchange:
A. notional principal amounts.
B. amortization schedules.
C. maturity dates of obligations.
D. cash flows at future points in time.
Answer: D
Question #9 (Topic: Topic 1)
A Chicago meat processor is concerned about the volatility of pork belly prices. Which of
the following derivative products would be used to fix these prices within a given range?
the following derivative products would be used to fix these prices within a given range?
A. Collar
B. Swap
C. Cap
D. Spot purchase
Answer: A
Question #10 (Topic: Topic 1)
On the basis of the following exchange rates,
which of the following currency amounts has the greatest value in U.S. dollars?
which of the following currency amounts has the greatest value in U.S. dollars?
A. C$750,000
B. £850,000
C. €900,000
D. ¥5,000,000
Answer: B
