You are a derivatives trader. Please answer the following multiple-choice questions, and explain your reasoning:

1) Assume a warrant on ABC share has a strike of EUR 40.00 and an exercise ratio of 0.1. The share is trading at EUR 45.00 and the warrant at EUR 0.70, resulting in a leverage of 6.4. If the share price were to increase to EUR 50.00 while the time value of the warrant remained constant, which of the following statements is true?

A - The warrant's price would increase, and its leverage would decrease
B - The warrant's price would increase, and its leverage would increase
C - The warrant's price would decrease and its leverage would decrease
D - The warrant's price would decrease and its leverage would increase

2) Which of the following is a risk associated with warrants?

A - There is no capital guarantee, and a total loss of invested capital is possible
B - Investors bear the risk of the issuer
C - Changes in implied volatility may cause you to lose money even if the price of the underlying remains unchanged
D - All the above
E - I don't know

3) Assume a warrant on ABC share. The warrant has a strike of EUR 40.00 and an exercise ratio of 0.1. The share is trading at EUR 45.00 and the warrant at EUR 0.70. The current leverage is 6.4 (the price of the share times ratio divided by the price of the warrant). If the share price were to decrease to EUR 41.00 while time value remains constant, which of the following statements is true?

A - The warrant's price would increase, and its leverage would decrease
B - The warrant's price would increase, and its leverage would increase
C - The warrant's price would decrease and its leverage would decrease
D - The warrant's price would decrease and its leverage would increase

4) Which of the following is true for Exchange Traded Notes (ETNs)?

A - ETNs are unsecured debt instruments and do not represent an interest in an underlying pool of assets

ETNs pay interest like traditional debit instruments

The ProShares Ultra VIX Short-Term Futures ETF (symbol: UVXY) is one example of a widely traded ETN

I don't know

Knock-out warrants (turbos), like vanilla warrants, derive their value from the difference between the price of the underlying and the strike. They differ significantly however from vanilla warrants in many important respects, except for:

Changes in implied volatility have little or no impact on knock-out products

They have little or no time value, which makes the instrument 'cheaper'

They can expire (knock-out) prematurely if the price of the underlying instrument touches or falls below (in the case of knock-out calls) or exceeds (in the case of knockout puts) a predetermined barrier-level

If the knock-out warrant has an expiration date, interest is not included in the premium

I don't know

Which of the following is a risk associated with volatility-related Exchange-Traded Products (ETPs)?

An ETP may not be benchmarked to the index it appears to track

Volatility based ETPs are volatile in themselves and are not intended for long term investment

ETPs that track the VIX usually reference the future, creating tracking error and potential price distortions

All the above

I don't know

Which of the following is NOT a characteristic of discount certificates?

The maximum payback on a discount certificate is limited to a predetermined amount (cap)

Discount certificates normally have a term to maturity of one to three years

Discount certificates make it possible to buy an underlying instrument for less than its current market price

The certificate returns the original investment if the price of the underlying instrument is above the cap on the maturity date

I don't know

How do warrants react to the stable underlying prices?

The value of the warrant tends to decrease due to the falling time value

The value of the call warrant rises and the value of a put warrant falls disproportionately

The value of the call warrant falls and the value of a put warrant rises disproportionately

I don't know

Which of the following is NOT a characteristic of warrants?

A warrant confers the right to buy (call-warrant) or sell (put-warrant) a specific quantity of a specific underlying instrument at a specific price over a specific period

Most listed warrants are physically settled, which means you can exercise the warrant to obtain the underlying physical share

Warrants may be traded on the stock exchange or over the counter

I don't know

A leveraged ETF aims to provide a 3x multiple of the daily return of the underlying index. The underlying index is 100 at the start, rises by 10% (to 110) on the first day and decreases by 10% (to 99) on the second day. The return of the leveraged ETF over the 2-day period (assuming no other expenses) is:

3% loss

9% loss

3% profit

I don't know