Exam 20: Options

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A hedge fund has written a call option on shares of a company with an exercise price of $17.45,and simultaneously also buys a call option on the same share with an exercise price of $16.95.The hedge fund is considered to have written a/an:

(Multiple Choice)

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Question 41

The value of a put option rises when the underlying asset experiences price declines.

(True/False)

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Question 42

In the options market,the right to buy an underlying asset lies with:

(Multiple Choice)

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Question 43

In expectation of increased price volatility,an investor purchased a call option and at the same time bought a put option with common exercise prices.The strategy is known as a:

(Multiple Choice)

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Question 44

Calculate the value of a long put if the exercise price is $10.00,the premium is $1.50 and the spot price is $8.00,given V=max(X-S,0)- P.

(Multiple Choice)

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Question 45

Calculate the value of a short call if the strike price is $10.00,the premium is $1.50 and the spot price is $8.00,given V = P - max(S-X,0).

(Multiple Choice)

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Question 46

The option that is a combination of a cap option and a floor option is a:

(Multiple Choice)

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Question 47

In the options market the short-call party has the right to sell shares at a specified price.

(True/False)

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Question 48

In the options markets a put option is said to be in-the-money if the:

(Multiple Choice)

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Question 49

Which of the following factors would tend to increase the size of the premium on an options contract?

(Multiple Choice)

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Question 50

Which of the following statements about calls and puts is incorrect?

(Multiple Choice)

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Question 51

An investor purchased a put option and at the same time wrote a put option at an exercise price lower than that of the long put option.The strategy is known as a:

(Multiple Choice)

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Question 52

A long-call party would exercise a call option with an exercise price of $9.00 and a premium of $1.50 if the current price of the underlying physical market asset is $8.00.

(True/False)

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Question 53

Which of the following is NOT true of calls and puts?

(Multiple Choice)

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Question 54

A call option is regarded as being in-the-money if:

(Multiple Choice)

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Question 55

What security gives the holder an option to purchase a specified number of shares at a predetermined price within a certain period of time?

(Multiple Choice)

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Question 56

The strategy whereby a company sells an interest rate option that puts a minimum level on how low an interest rate may fall is a:

(Multiple Choice)

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Question 57

In the Australian options markets the warrant that has an upper limit applied to the upside profit available for the holder is a/an:

(Multiple Choice)

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Question 58

In relation to options when interest rates increase,the:

(Multiple Choice)

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Question 59

The highly geared option contract on individual stocks on the ASX with an exercise price of between one and ten cents is a/an:

(Multiple Choice)

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Question 60

Showing 41 - 60 of 109

Exam 20: Options

A hedge fund has written a call option on shares of a company with an exercise price of $17.45,and simultaneously also buys a call option on the same share with an exercise price of $16.95.The hedge fund is considered to have written a/an:

The value of a put option rises when the underlying asset experiences price declines.

In the options market,the right to buy an underlying asset lies with:

In expectation of increased price volatility,an investor purchased a call option and at the same time bought a put option with common exercise prices.The strategy is known as a:

Calculate the value of a long put if the exercise price is $10.00,the premium is $1.50 and the spot price is $8.00,given V=max(X-S,0)- P.

Calculate the value of a short call if the strike price is $10.00,the premium is $1.50 and the spot price is $8.00,given V = P - max(S-X,0).

The option that is a combination of a cap option and a floor option is a:

In the options market the short-call party has the right to sell shares at a specified price.

In the options markets a put option is said to be in-the-money if the:

Which of the following factors would tend to increase the size of the premium on an options contract?

Which of the following statements about calls and puts is incorrect?

An investor purchased a put option and at the same time wrote a put option at an exercise price lower than that of the long put option.The strategy is known as a:

A long-call party would exercise a call option with an exercise price of $9.00 and a premium of $1.50 if the current price of the underlying physical market asset is $8.00.

Which of the following is NOT true of calls and puts?

A call option is regarded as being in-the-money if:

What security gives the holder an option to purchase a specified number of shares at a predetermined price within a certain period of time?

The strategy whereby a company sells an interest rate option that puts a minimum level on how low an interest rate may fall is a:

In the Australian options markets the warrant that has an upper limit applied to the upside profit available for the holder is a/an:

In relation to options when interest rates increase,the:

The highly geared option contract on individual stocks on the ASX with an exercise price of between one and ten cents is a/an:

A Modern Financial System: An Overview

Commercial Banks

Non-Bank Financial Institutions

The Share Market and the Corporation

Corporations Issuing Equity in the Share Market

Investors in the Share Market

Forecasting Share Price Movements

Mathematics of Finance: An Introduction to Basic Concepts and Calculations

Short-Term Debt

Medium-To-Long-Term Debt

International Debt Markets

Government Debt, monetary Policy and the Payments System

An Introduction to Interest Rate Determination and Forecasting

Interest Rate Risk

Foreign Exchange: The Structure and Operation of the Fx Market

Foreign Exchange: Factors That Influence the Exchange Rate

Foreign Exchange: Risk Identification and Management

An Introduction to Risk Management and Derivatives

Future Contracts and Forward Rate Agreements

Interest Rate Swaps, Cross-Currency Swaps and Credit Default

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