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PRMIA Exam 8006 Topic 9 Question 75 Discussion

Actual exam question for PRMIA's Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition exam
Question #: 75
Topic #: 9
[All Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition Questions]

Which of the following is NOT a historical event which serves as an example of a short squeeze that happened in the markets?

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Suggested Answer: B

There was no event such as the CDO squeeze in 2008. (Quite on the contrary, securitized products were selling at distressed prices.).

The silver squeeze of 1979-80 (Hunt brothers), the Chicago fire of 1872 (leading to a short squeeze on wheat), and the wheat squeeze (Hutchingson) of 1866 are real historical events that led to short squeezes in commodity markets. Choice 'b' is therefore the correct answer.

For the PRM exam, you should try to remember the event broadly, and the commodity involved.


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