CFA 2026 Level I Derivatives Derivative Markets Free Quiz 2

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CFA 2026 Level I Derivatives Derivative Markets Free Quiz 2

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CFA 2026 Level I Derivatives Derivative Markets Free Quiz 2

Practice CFA 2026 Level I Derivatives MCQs from Derivative Markets. Get instant results with Explanation.

General5 MCQs

11. What is margin in derivative markets?

A. The price of the derivative contract.B. The commission paid to the broker.C. Collateral posted to cover potential losses.D. The notional amount of the contract.

12. What is the difference between initial margin and maintenance margin?

A. Initial margin is the minimum amount required to keep a position open.B. Maintenance margin is the amount required to open a position.C. Both are the same.D. Initial margin is required to open; maintenance margin is the minimum to keep open.

13. What is a margin call?

A. A request for additional collateral when margin falls below maintenance level.B. A request for the initial margin.C. A request for the final settlement payment.D. A notice of default.

14. What is mark-to-market in derivative markets?

A. Valuing a contract at its original cost.B. Valuing a contract at its current market price.C. Valuing a contract at its maturity value.D. Valuing a contract at its historical cost.

15. What is the difference between long and short positions?

A. Long positions benefit from price decreases; short positions benefit from price increases.B. Both long and short positions benefit from price increases.C. Long positions benefit from price increases; short positions benefit from price decreases.D. Both long and short positions benefit from price decreases.

General5 MCQs

16. What is the notional amount of a derivative contract?

A. The amount exchanged at the inception of the contract.B. The market value of the contract.C. The price of the underlying asset.D. The principal amount on which the derivative payments are calculated.

17. What is price discovery in derivative markets?

A. Determining the fair price of an asset.B. Reducing risk through offsetting positions.C. Taking on risk to profit from price movements.D. Profiting from price differences in different markets.

18. Why is a derivative contract often considered a zero-sum game?

A. A positive-sum game where both parties can profit.B. A zero-sum game where one party's gain is the other's loss.C. A negative-sum game where both parties lose.D. A game where the outcome is uncertain.

19. What types of assets can be underlying for derivatives?

A. Only financial assets.B. Only commodities.C. Financial assets, commodities, or indices.D. Only indices.

20. What is a derivatives exchange?

A. Over-the-counter marketB. Dark poolC. Electronic communication networkD. Derivatives exchange

📋 CFA - Test Online Practice Quizzes

CFA

Conducting Body: CFA Institute

Frequency: 4 times a year (February, May, August, November) | Time: 135 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 90 MCQs):

Alternative Investments: 8 MCQs
Corporate Issuers: 7 MCQs
Derivatives: 5 MCQs
Economics: 7 MCQs
Equity Investments: 12 MCQs
Ethics: 16 MCQs
Financial Statement Analysis: 11 MCQs
Fixed Income: 11 MCQs
Portfolio Management: 9 MCQs
Quant Methods: 6 MCQs

Merit Formula: -

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