Circle the letter for each question / statement for the correct choice as your answer.

13. Which one of the following institutions is considered a Commodities Market?

a. New York Stock Exchange

b. Nikkei 225

c. NASDAQ

d. Federal Reserve System

e. Chicago Mercantile Exchange Board

14. The following derivative contract that gives the purchaser or the holder the right to buy or sell a financial instrument at a specified or a predetermined price within a

specified period of time is called a (an):

a. Swap

b. Forward

c. Future

d. Option

e. Bond

15. The theory which suggests that, long run changes in the exchange rates between two countries are determined by changes in the relative price levels of the two countries so that identical goods costs the same (law of one price) in the two countries, is called

a. Theory of Hedging

b. Theory of Arbitrage

c. Theory of International Fisher Effect

d. Theory of Purchasing Power Parity

e. Theory of Forward Exchange Rates