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 3 of 7

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Q21.
The second step in binomial approach of option pricing is to define range of values
Discuss
Answer: (a).at expiration
Q22.
An increase in value of option leads to low present value of exercise cost only if it has
Discuss
Answer: (b).interest rates are high
Discuss
Answer: (b).equalize the range of payoffs
Q24.
A type of contract in which the contract holder has the right to sell an asset at specific period for predetermining price is classified as
Discuss
Answer: (a).option
Q25.
According to the Black Scholes model, the short term seller receives today's price which
Discuss
Answer: (c).full cash proceeds
Q26.
An investor who writes stock call options in his own portfolio is classified as
Discuss
Answer: (b).covered option
Q27.
According to put call parity relationship, a call option minus put option in addition with present value of exercise is equal to
Discuss
Answer: (d).stock
Q28.
The current value of stock included in portfolio is subtracted from current option price to calculate
Discuss
Answer: (b).present value of portfolio
Q29.
In financial planning, the most high option price will lead to
Discuss
Answer: (a).longer option period
Q30.
The current option is $700 and the current value of stock in portfolio is $1400 then the present value of portfolio will be
Discuss
Answer: (c).700
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