FRM 2026 Part I Financial Markets and Products Forwards Free Quiz 1

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FRM 2026 Part I Financial Markets and Products Forwards Free Quiz 1

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FRM 2026 Part I Financial Markets and Products Forwards Free Quiz 1

Practice FRM 2026 Part I Financial Markets and Products MCQs from Forwards. Get instant results with Explanation.

General10 MCQs

1. What is a forward contract?

A. Forwards are standardized exchange-traded contractsB. Forwards are customized OTC agreementsC. Forwards are marked-to-market dailyD. Forwards are the same as futures

2. What is the key difference between forwards and futures?

A. Forwards are exchange-traded; futures are OTCB. Forwards are marked-to-market dailyC. Forwards are customized OTC; futures are standardized and exchange-tradedD. There is no difference between forwards and futures

3. What are the obligations of parties in a forward contract?

A. Both parties in a forward contract are obligated to performB. Only the buyer is obligated in a forward contractC. Only the seller is obligated in a forward contractD. Neither party is obligated in a forward contract

4. What is the payoff of a forward contract?

A. Long forward payoff = ST + KB. Long forward payoff = K - STC. Short forward payoff = ST - KD. Long forward payoff = ST - K; short forward payoff = K - ST

5. What is the forward price?

A. The forward price changes dailyB. The forward price is fixed at inception and does not changeC. The forward price is the same as the spot priceD. The forward price is determined at maturity

General10 MCQs

6. What is the formula for the forward price of a non-dividend-paying asset?

A. Forward price = S0 × e^(-rT)B. Forward price = S0 / e^(rT)C. Forward price = S0 × e^(rT)D. Forward price = S0 × (1 + rT)

7. How are dividends incorporated into the forward price?

A. Forward price = (S0 - PV(D)) × e^(rT)B. Forward price = (S0 + PV(D)) × e^(rT)C. Forward price = S0 × e^(rT) - PV(D)D. Forward price = S0 × e^(rT) + PV(D)

8. What is the value of a forward contract before maturity?

A. Forward value = (F - F0) × e^(rT)B. Forward value = (F0 - F) × e^(-rT)C. Forward value = (F - F0)D. Forward value = (F - F0) × e^(-rT)

9. What is the credit risk in forward contracts?

A. There is no credit risk in forward contractsB. Credit risk exists in forward contracts because they are not marked-to-market dailyC. Credit risk is higher in futures than in forwardsD. Credit risk is eliminated by the clearinghouse

10. What is a non-deliverable forward (NDF)?

A. An NDF is physically deliveredB. An NDF is the same as a standard forwardC. An NDF is cash-settled and used for non-convertible currenciesD. An NDF is only for commodities

📋 FRM - Test Online Practice Quizzes

FRM

Conducting Body: Global Association of Risk Professionals GARP

Frequency: three times a year: May, August, and November | Time: 240 Minutes

Negative Marking: No

⚡ Test Pattern (Total: 100 MCQs):

Foundations of Risk Management: 25 MCQs
Quantitative Analysis: 25 MCQs
Financial Markets and Products: 25 MCQs
Valuation and Risk Models: 25 MCQs

Merit Formula: -

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