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
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
