A Contract Whose Payoff Increases as a Yield Spread Increases

question 59

Multiple Choice

A contract whose payoff increases as a yield spread increases above some stated exercise spread is a

• A)put option.
• B)call option.
• C)digital default option.
• D)futures option.
• E)credit spread call option.

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Definitions:

Early Supply Involvement (ESI)

A procurement strategy where suppliers are involved in the product development process at an early stage to enhance innovation and reduce costs.

Relationship Management

Strategies and practices for maintaining and enhancing relationships with clients, customers, and other stakeholders.

Need Recognition

The first stage in the buying process, where the consumer identifies a need or problem that needs to be solved or fulfilled.

Purchaser-supplier Satisfaction Matrix

A tool used to measure and analyze the satisfaction levels between buyers and suppliers, facilitating better business relationships.