Question: A hedge and forget strategy can be used for a linear product to preserve its delta neutrality. True False Counterparty credit risk is the risk

  1. A "hedge and forget" strategy can be used for a linear product to preserve its delta neutrality.

    True

    False

  2. Counterparty credit risk is the risk that the other party of a contract will default on contract obligations.

    True

    False

  3. In Moody's KMV model, the terminal payoff of a firm's equity is similar to that of a call option.

    True

    False

  4. Which of the following products are nonlinear products?

    A.

    Forward contracts
    B.

    Futures contracts
    C.

    Options contract
    D.

    All of the above

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