ACTUARIAL SCIENCE DERIVATIVES QUESTIONS AND VERIFIED ANSWERS|100% CORRECT|GRADE A+

ACTUARIAL SCIENCE DERIVATIVES
QUESTIONS AND VERIFIED
ANSWERS|100% CORRECT|GRADE A+
Long forward description - ANSWER agree to buy an asset in future at set price



short forward description - ANSWER agree to sell an asset in future at set price



buy a call description - ANSWER buy the right to buy an asset at a fixed price



write a call description - ANSWER obliged to possibly sell asset at fixed price



negative slope - ANSWER you are bearish



positive slope - ANSWER you are bullish



buy a put description - ANSWER buy the right to sell an asset at a fixed price



write a put description - ANSWER obliged to possibly buy asset at fixed price



(derivative and outlook) long forward - ANSWER long, bullish



(derivative and outlook) short forward - ANSWER short, bearish



(derivative and outlook) buy a call - ANSWER long, bullish



(derivative and outlook) write a call - ANSWER short, bearish



(derivative and outlook) buy a put - ANSWER long, bearish

, (derivative and outlook) write a put - ANSWER short, bullish



call bull spread - ANSWER buy call (k1) and sell a call (k2)



put bull spread - ANSWER buy a put (k1) and sell a put (k2)



call bear spread - ANSWER sell a call (k1) and buy a call (k2)



put bear spread - ANSWER sell a put (k1) and buy a put (k2)



call ratio spread - ANSWER buy m calls at (k1) and sell n call at (k2)



put ratio spread - ANSWER sell m puts at (k1) and buy n puts with (k2)



floor - ANSWER long asset, long put



cap - ANSWER short asset, long call



bear spread - ANSWER sell low and buy high



bull spread - ANSWER buy low and sell high



covered call - ANSWER long asset, short call



covered put - ANSWER short asset, short put



synthetic long forward - ANSWER short put, long call