Which of the Following Is Approximately True

question 7

Multiple Choice

Which of the following is approximately true

• A) FVA can be calculated from the initial value of a derivative
• B) FVA can be calculated on a transaction-by-transaction basis without considering the whole portfolio of derivatives a dealer has with a counterparty
• C) FVA should theoretically depend on a dealer's funding cost
• D) None of the above

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Definitions:

Physiological Responses

Automatic reactions of the body to a stimulus, involving biological or bodily systems and processes, such as heart rate and hormone release.

Cannon-Bard Theory

A theory of emotion that proposes that emotions and bodily changes occur simultaneously following a stimulus, rather than one causing the other.

Two-factor Theory

A theory proposing that emotional experiences arise from a combination of bodily reactions and the cognitive labeling of the reason for the physical reaction.

Cognitive Labeling

The process of identifying and naming emotions and feelings, which can influence how they are experienced and managed.