OPTIONS FUTURES AND OTHER
DERIVATIVES 11TH EDITION JOHN C HULL
TEST BANK MCQS ONLY ALL CHAPTERS
100% ORIGINAL VERIFIED A+
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ Commodity Futures Trading Commission Answer: A body that
regulates trading in futures contracts in the United States.
⫸ Callable Bond Answer: A bond containing provisions that allow the
issuer to buy it back at a predetermined price at certain times during its
life.
⫸ Zero-Coupon Bond Answer: A bond that provides no coupons.
⫸ Puttable Bond Answer: A bond where the holder has the right to sell
it back to the issuer at certain predetermined times for a predetermined
price.
⫸ Extendable Bond Answer: A bond whose life can be extended at the
option of the holder.
⫸ Dividend Answer: A cash payment made to the owner of a stock.
,⫸ Synthetic CDO Answer: A CDO created by selling credit default
swaps.
⫸ Downgrade Trigger Answer: A clause in a contract that states that the
contract will be terminated with a cash settlement if the credit rating of
one side falls below a certain level.
⫸ Central Clearing Party Answer: A clearing house used for over-the-
counter contracts.
⫸ Box Spread Answer: A combination of a bull spread created from
calls and a bear spread created from puts.
⫸ Interest Rate Collar Answer: A combination of an interest-rate cap
and an interest rate floor.
⫸ Futures Contract Answer: A contract that obligates the holder to buy
or sell an asset at a predetermined delivery price during a specified
future time period. The contract is settled daily.
⫸ Forward Contract Answer: A contract that obligates the holder to buy
or sell an asset for a predetermined delivery price at a predetermined
future time.
⫸ Day Count Answer: A convention for quoting interest rates.
,⫸ Convertible Bond Answer: A corporate bond that can be converted
into a predetermined amount of the company's equity at certain times
during its life.
⫸ FICO Answer: A credit score developed by Fair Isaac Corporation.
⫸ Eurocurrency Answer: A currency that is outside the formal control
of the issuing country's monetary authorities.
⫸ Package Answer: A derivative that is a portfolio of standard calls and
puts, possibly combined with a position in forward contracts and the
asset itself.
⫸ Quanto Answer: A derivative where the payoff is defined by
variables associated with one currency but is paid in another currency.
⫸ Credit Derivative Answer: A derivative whose payoff depends on the
creditworthiness of one or more companies or countries.
⫸ Interest Rate Derivative Answer: A derivative whose payoffs are
dependent on future interest rates.
⫸ Implied Distribution Answer: A distribution for a future asset price
implied from option prices.
, ⫸ Bivariate Normal Distribution Answer: A distribution for two
correlated variables, each of which is normal.
⫸ Stock Dividend Answer: A dividend paid in the form of additional
shares.
⫸ Eurodollar Answer: A dollar held in a bank outside the United States.
⫸ Conversion Factor Answer: A factor used to determine the number of
bonds that must be delivered in the Chicago Board of Trade bond futures
contract.
⫸ Clearing House Answer: A firm that guarantees the performance of
the parties in a derivatives transaction (also referred to as a clearing
corporation).
⫸ Prepayment function Answer: A function estimating the prepayment
of principal on a portfolio of mortgages in terms of other variables.
⫸ Index Futures Answer: A futures contract on a stock index or other
index.
⫸ Treasury Bond Futures Answer: A futures contract on Treasury
bonds.
⫸ Treasury Note Futures Answer: A futures contract on Treasury notes.
DERIVATIVES 11TH EDITION JOHN C HULL
TEST BANK MCQS ONLY ALL CHAPTERS
100% ORIGINAL VERIFIED A+
CERTIFICATION REVIEW SET 2026
ANSWERS GUARANTEED PASS
⫸ Commodity Futures Trading Commission Answer: A body that
regulates trading in futures contracts in the United States.
⫸ Callable Bond Answer: A bond containing provisions that allow the
issuer to buy it back at a predetermined price at certain times during its
life.
⫸ Zero-Coupon Bond Answer: A bond that provides no coupons.
⫸ Puttable Bond Answer: A bond where the holder has the right to sell
it back to the issuer at certain predetermined times for a predetermined
price.
⫸ Extendable Bond Answer: A bond whose life can be extended at the
option of the holder.
⫸ Dividend Answer: A cash payment made to the owner of a stock.
,⫸ Synthetic CDO Answer: A CDO created by selling credit default
swaps.
⫸ Downgrade Trigger Answer: A clause in a contract that states that the
contract will be terminated with a cash settlement if the credit rating of
one side falls below a certain level.
⫸ Central Clearing Party Answer: A clearing house used for over-the-
counter contracts.
⫸ Box Spread Answer: A combination of a bull spread created from
calls and a bear spread created from puts.
⫸ Interest Rate Collar Answer: A combination of an interest-rate cap
and an interest rate floor.
⫸ Futures Contract Answer: A contract that obligates the holder to buy
or sell an asset at a predetermined delivery price during a specified
future time period. The contract is settled daily.
⫸ Forward Contract Answer: A contract that obligates the holder to buy
or sell an asset for a predetermined delivery price at a predetermined
future time.
⫸ Day Count Answer: A convention for quoting interest rates.
,⫸ Convertible Bond Answer: A corporate bond that can be converted
into a predetermined amount of the company's equity at certain times
during its life.
⫸ FICO Answer: A credit score developed by Fair Isaac Corporation.
⫸ Eurocurrency Answer: A currency that is outside the formal control
of the issuing country's monetary authorities.
⫸ Package Answer: A derivative that is a portfolio of standard calls and
puts, possibly combined with a position in forward contracts and the
asset itself.
⫸ Quanto Answer: A derivative where the payoff is defined by
variables associated with one currency but is paid in another currency.
⫸ Credit Derivative Answer: A derivative whose payoff depends on the
creditworthiness of one or more companies or countries.
⫸ Interest Rate Derivative Answer: A derivative whose payoffs are
dependent on future interest rates.
⫸ Implied Distribution Answer: A distribution for a future asset price
implied from option prices.
, ⫸ Bivariate Normal Distribution Answer: A distribution for two
correlated variables, each of which is normal.
⫸ Stock Dividend Answer: A dividend paid in the form of additional
shares.
⫸ Eurodollar Answer: A dollar held in a bank outside the United States.
⫸ Conversion Factor Answer: A factor used to determine the number of
bonds that must be delivered in the Chicago Board of Trade bond futures
contract.
⫸ Clearing House Answer: A firm that guarantees the performance of
the parties in a derivatives transaction (also referred to as a clearing
corporation).
⫸ Prepayment function Answer: A function estimating the prepayment
of principal on a portfolio of mortgages in terms of other variables.
⫸ Index Futures Answer: A futures contract on a stock index or other
index.
⫸ Treasury Bond Futures Answer: A futures contract on Treasury
bonds.
⫸ Treasury Note Futures Answer: A futures contract on Treasury notes.
