OPTIONS, FUTURES AND OTHER
DERIVATIVES CERTIFICATION SCRIPT 2026
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉speculators. Answer: derivatives traders who use them to bet on
the future direction of a market variable
◉arbitrageurs. Answer: derivatives traders who take offsetting
positions in two or more instruments to lock in a profit
◉long/short equities hedge fund. Answer: hedge fund whose
strategy is to purchase securities considered to be undervalued and
short those who are considered to be overvalued in such a way that
the exposure to the overall direction of the market is small
◉convertible arbitrage hedge fund. Answer: hedge fund whose
strategy is to take a long position in a convertible bond combined
with an actively managed short position in the underlying equity
, ◉distressed securities hedge fund. Answer: hedge fund whose
strategy is to buy securities issued by companies in or close to
bankruptcy
◉emerging markets hedge fund. Answer: hedge fund whose strategy
is to invest in a debt and equity of companies in developing or
emerging countries and int he debt of the countries themselves
◉global macro hedge funds. Answer: hedge fund whose strategy is
to carry out trades that reflect anticipated global macroeconomic
trends
◉merger arbitrage hedge funds. Answer: hedge fund whose strategy
is to trade after a merger or acquisition is announced so that a profit
is made if the announced deal takes place
◉closing out a position. Answer: entering into the opposite trade to
the original one
◉notice of intention to deliver. Answer: a notice that indicates
selections the seller has made with respect to the grade of the asset
that will be delivered and the delivery location
◉contract size. Answer: specifies the amount of the asset that has to
be delivered under one contract
DERIVATIVES CERTIFICATION SCRIPT 2026
COMPLETE QUESTIONS AND CORRECT
ANSWERS
◉speculators. Answer: derivatives traders who use them to bet on
the future direction of a market variable
◉arbitrageurs. Answer: derivatives traders who take offsetting
positions in two or more instruments to lock in a profit
◉long/short equities hedge fund. Answer: hedge fund whose
strategy is to purchase securities considered to be undervalued and
short those who are considered to be overvalued in such a way that
the exposure to the overall direction of the market is small
◉convertible arbitrage hedge fund. Answer: hedge fund whose
strategy is to take a long position in a convertible bond combined
with an actively managed short position in the underlying equity
, ◉distressed securities hedge fund. Answer: hedge fund whose
strategy is to buy securities issued by companies in or close to
bankruptcy
◉emerging markets hedge fund. Answer: hedge fund whose strategy
is to invest in a debt and equity of companies in developing or
emerging countries and int he debt of the countries themselves
◉global macro hedge funds. Answer: hedge fund whose strategy is
to carry out trades that reflect anticipated global macroeconomic
trends
◉merger arbitrage hedge funds. Answer: hedge fund whose strategy
is to trade after a merger or acquisition is announced so that a profit
is made if the announced deal takes place
◉closing out a position. Answer: entering into the opposite trade to
the original one
◉notice of intention to deliver. Answer: a notice that indicates
selections the seller has made with respect to the grade of the asset
that will be delivered and the delivery location
◉contract size. Answer: specifies the amount of the asset that has to
be delivered under one contract
