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8006 practice test questions answers

PRMIA 8006 Dumps Questions Answers

Exam Code:
8006
Last Update: Dec 18, 2024
287 Questions
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Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition Questions and Answers

Questions 1

The two components of risk in a commodities futures portfolio are:

Options:

A.

Changes in the convenience yield and storage costs

B.

Changes in spot prices and carrying costs, also called commodity lease rates

C.

Changes in interest rates and spot prices

D.

The risk from change in basis and interest rates

Questions 2

An investor holds $1m in a 10 year bond that has a basis point value (or PV01) of 5 cents. She seeks to hedge it using a 30 year bond that has a BPV of 8 cents. How much of the 30 year bond should she buy or sell to hedge against parallel shifts in the yield curve?

Options:

A.

Sell $1,600,000

B.

Sell $625,000

C.

Buy $1,000,000

D.

Buy $1,600,000

Questions 3

The cheapest to deliver bond for a treasury bond futures contract is the one with the :

Options:

A.

the lowest yield to maturity adjusted by the conversion factor

B.

the lowest coupon

C.

the lowest basis when comparing cash price to the futures spot price adjusted by the conversion factor

D.

the highest coupon

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