Define the terms, or give short explanations.     -arbitrage -business risk -call -cash market/spot market -derivative/derivative market -derivative security

a)differentiate between business risk and financial risk within a company.   b)differentiate between real assets and financial assets of a company.  c)differentiate between cash (spot) markets and derivative markets.  d)describe the major differences between forward contracts and option contracts.

True or false question

a)define interest rate swaptions, and differentiate between payer swaptions and receiver swaptions.    b)define forward swaps.     c)define risk management.    d)discuss reasons for practicing risk management.    e)discuss how firms can benefit from risk management.

Describe financial instruments and investment derivatives,

Liabilities What is the reason for having a market for liabilities? Please Explain. Or give Example.

describe the process of short selling.   define the theoretical fair value of an asset and relate it to the concept of market efficiency.   discuss and relate the concepts of arbitrage and the law of one price.    describe how and why risk is transferred from hedgers to speculators in derivative  markets.

Describe Derivatives Used to Hedge Risk.

Negotiable instruments of ownership or debt such as stocks and bonds are examples of a. securities. b. debentures. c. portfolios. d. collateral.

3. These are instruments that derive its value from an underlying asset such as bonds, stocks, commodities, interest, currency, etc. a. Short-term investments b. Derivative securities c. Equity securities d. Debt securities e. None of the above