Financial Options MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Financial Options, a fundamental topic in the field of Financial Management and Financial Markets. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Financial Options MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Financial Options mcq questions that explore various aspects of Financial Options problems. Each MCQ is crafted to challenge your understanding of Financial Options principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace Financial Management and Financial Markets tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Financial Options MCQs are your pathway to success in mastering this essential Financial Management and Financial Markets topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Financial Options. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Financial Options knowledge to the test? Let's get started with our carefully curated MCQs!

Financial Options MCQs | Page 2 of 7

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Q11.
The situation in financial options in which the strike price is less than current price of stock is classified as
Discuss
Answer: (a).in-the-money
Q12.
In put call parity relationship, the present value of exercise price is added to call option which is equal to
Discuss
Answer: (a).put option stock
Q13.
An option that gives investors the right to sell a stock at predefined price is classified as
Discuss
Answer: (a).put option
Q14.
The value of stock is $250 and the call option obligation is $100 then the current value of portfolio would be
Discuss
Answer: (b).150
Q15.
In binomial approach of option pricing model, the fourth step is to create
Discuss
Answer: (c).riskless investment
Q16.
The current value of portfolio is $550 and to cover an obligation of call option is $200 then the value of stock would be
Discuss
Answer: (c).750
Q17.
According to the Black Scholes model, the purchaser can borrow fraction of security at risk free interest rate which is
Discuss
Answer: (a).short term
Q18.
The type of option which cannot be exercised before an expiry date which is classified as
Discuss
Answer: (a).European option
Q19.
In put call parity relationship, the put option minus call option in addition with stock is equal to
Discuss
Answer: (a).exercise price present value
Q20.
The current option is $800 and the current value of stock in portfolio is $1900 then the present value of portfolio would be
Discuss
Answer: (c).1100
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