What does vega measure? What can you tell from vega value? Can the vega of a derivatives portfolio be changed by taking a position in the underlying asset? Explain your answer.

What is margin requirement (for futures)?

What is relationship between the returns on an asset and returns in the whole market (market portfolio)?

How are derivatives recorded?

Describe forwards, futures, and swaps.  What are the features of each type of derivative and how are these derivatives used to hedge risk or speculate?

(a) What is the CML? Include a graph in your answer. (b) Do all individual assets plot below the CML? Why or why not? Explain.  c)  "As we have the CAPM, we do not need portfolio theory." True or False. Explain

Explain the Use of Derivatives to Hedge Portfolio Risk?

How do forwards, futures, and swaps hedge risk?

INTEREST RATE RISK  In the context of the repricing gap model, what is the spread effect? How does it affect the change in net interest income?

Please draw the Capital Market Line and the Security Market Line. Please write down their function forms and explain the differences between these two lines.