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Question 1

Sorry, that's incorrect.
The Correct Answer is Liquidity risk.
The size of the bid-ask spread is best used as a measure of:

Question 2

Sorry, that's incorrect.
The Correct Answer is Event risk.
The risk that an unanticipated regulatory change will flood the market with divested securities is most likely a form of:

Question 3

Sorry, that's incorrect.
The Correct Answer is A different counterparty than in the original contract.
Which of the following methods for terminating a forward contract prior to expiration exposes participants to the most credit risk? Taking an offsetting position with:

Question 4

Sorry, that's incorrect.
The Correct Answer is Forward.
Which of the following contracts exposes the seller to the most counterparty risk?

Question 5

Sorry, that's incorrect.
The Correct Answer is Scenario analysis.

Which of the following is most appropriate to analyze the risk of alternative investments with negatively skewed returns?

Question 6

Sorry, that's incorrect.
The Correct Answer is Weighted average of all loss outcomes in excess of the value-at-risk loss.

Conditional value at risk is best described as the:

Question 7

Sorry, that's incorrect.
The Correct Answer is Engaging in an offsetting transaction with the same counterparty.

When terminating a forward contract prior to expiration, an investor most likely avoids credit risk by:

Question 8

Sorry, that's incorrect.
The Correct Answer is Average amount of loss.

Which of the following is not an element of the value at risk (VaR) measure?

Question 9

Sorry, that's incorrect.
The Correct Answer is Callable preference shares.

All else being equal, which of the following securities exposes the investor to the most risk?

Question 10

Sorry, that's incorrect.
The Correct Answer is Pricing risk.

The risk for a hedge fund arising from marking to market complex securities in a margin account with a broker-dealer is most likely: