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MCQs

Total Questions : 68 | Page 2 of 7 pages
Question 11. The value of the option which is considered as its worth as soon as it is expired is classified as
  1.    minimum option value
  2.    minimum value
  3.    maximum value
  4.    exercise value
 Discuss Question
Answer: Option D. -> exercise value
Answer: (d).exercise value
Question 12. The variability of stock price, option term to maturity and the risk free rate are the dependents of
  1.    price of an option
  2.    expiry of an option
  3.    exercise of an option
  4.    estimation of an option
 Discuss Question
Answer: Option A. -> price of an option
Answer: (a).price of an option
Question 13. The movement of price or the rise or fall of prices of options is classified as
  1.    option lattice
  2.    pricing movement
  3.    price change
  4.    binomial lattice
 Discuss Question
Answer: Option D. -> binomial lattice
Answer: (d).binomial lattice
Question 14. The call options situation in which the strike price is greater than current price of stock is classified as
  1.    out-of-the-portfolio
  2.    in-the-portfolio
  3.    in-the-money
  4.    out-of-the-money
 Discuss Question
Answer: Option D. -> out-of-the-money
Answer: (d).out-of-the-money
Question 15. The current value of stock including in portfolio is subtracted from present value of portfolio to calculate
  1.    last month option price
  2.    last year option price
  3.    current option price
  4.    future option price
 Discuss Question
Answer: Option C. -> current option price
Answer: (c).current option price
Question 16. In binomial approach of option pricing model, the value of stock is subtracted from call option obligation value to calculate
  1.    current value of portfolio
  2.    future value of portfolio
  3.    put option value
  4.    call option value
 Discuss Question
Answer: Option A. -> current value of portfolio
Answer: (a).current value of portfolio
Question 17. According to exercise value and option price, the market value of the option will be zero when
  1.    stock price is maximum
  2.    option price is zero
  3.    stock price is zero
  4.    stock price is minimum
 Discuss Question
Answer: Option C. -> stock price is zero
Answer: (c).stock price is zero
Question 18. The current value of stock in portfolio with current option price $20 is $50, then present value of portfolio would be
  1.    30
  2.    70
  3.    0.0167
  4.    0.3
 Discuss Question
Answer: Option A. -> 30
Answer: (a).30
Question 19. At the last day when the European and American option can be exercised is classified as
  1.    European date
  2.    American date
  3.    expiration date
  4.    money date
 Discuss Question
Answer: Option C. -> expiration date
Answer: (c).expiration date
Question 20. An excess of actual price of option over an exercise value of option is classified as
  1.    time value options
  2.    actual options
  3.    estimated options
  4.    optional pricing
 Discuss Question
Answer: Option A. -> time value options
Answer: (a).time value options

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