1. | According to the Black Scholes model, the stocks with the call option pays the |
a. | dividends |
b. | no dividends |
c. | current price |
d. | past price |
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Answer: (b).no dividends
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2. | An exercise of option in future and the part of option call value depends specifically on |
a. | PV of exercising cost |
b. | FV of exercising cost |
c. | PV of cost volatility |
d. | FV of cost volatility |
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Answer: (a).PV of exercising cost
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3. | The yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an |
a. | option closing price |
b. | option beginning price |
c. | option expiration |
d. | option model |
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Answer: (c).option expiration
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4. | The long-term equity anticipation security is usually classified as |
a. | short-term options |
b. | long-term options |
c. | short money options |
d. | yearly call |
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Answer: (b).long-term options
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5. | The types of option markets do not include |
a. | European option |
b. | American option |
c. | expiry option |
d. | covered options |
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Answer: (c).expiry option
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