E-PolyLearning

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

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

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

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

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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