Example of derivative security

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Reference no: EM131947840

1. Which of the following would be an example of a derivative security?

a. A common share of a General Motors

b. A general revenue municipal bond

c. A call option on Mobil stock

d. A commodity futures contract

e. Both a and b

f. Both c and d

2. Which of the following bank accounts has the highest effective annual return?

a. An account which pays 10% nominal interest with monthly compounding

b. An account which pays 10% nominal interest with daily compounding

c. An account which pays 10% nominal interest with annual compounding

d. An account which pays 9% nominal interest with daily compounding

e. An account which pays 10% nominal interest with quarterly compounding

f. All of the above investments have the same effective annual return

Reference no: EM131947840

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