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MCQs

Total Questions : 176 | Page 9 of 18 pages
Question 81. Consider buying the put option, if the price is lower at the expiration date of option then the
  1.    liquidity will be higher
  2.    loss will be higher
  3.    profit will be lower
  4.    profit will be higher
 Discuss Question
Answer: Option D. -> profit will be higher
Answer: (d).profit will be higher
Question 82. If the stock price of call option is $300 and the exercise price of call option is $260 then the intrinsic value of option is
  1.    260
  2.    560
  3.    40
  4.    300
 Discuss Question
Answer: Option C. -> 40
Answer: (c).40
Question 83. The type of voting in which the owner having half voting shares can elect board of directors is called
  1.    directors voting
  2.    half voting
  3.    straight voting
  4.    owners voting
 Discuss Question
Answer: Option C. -> straight voting
Answer: (c).straight voting
Question 84. The type of option that gives the right to buyer to sell the underlying option at specific exercise price is considered as
  1.    call option
  2.    put option
  3.    European option
  4.    Australian option
 Discuss Question
Answer: Option B. -> put option
Answer: (b).put option
Question 85. The type of preferred stock whose paid dividends are more than the promised dividends is classified as
  1.    non-cumulative preferred stock
  2.    cumulative preferred stock
  3.    non participating preferred stock
  4.    participating preferred stock
 Discuss Question
Answer: Option D. -> participating preferred stock
Answer: (d).participating preferred stock
Question 86. According to futures contract, the long position states the
  1.    purchase of forward contracts
  2.    purchase of future contract
  3.    sale of futures contract
  4.    sales of forward contracts
 Discuss Question
Answer: Option B. -> purchase of future contract
Answer: (b).purchase of future contract
Question 87. The speed with which the prices of stocks are adjusted to unexpected news related to interest rates is called
  1.    news efficiency
  2.    adjusted efficiency
  3.    expected efficiency
  4.    market efficiency
 Discuss Question
Answer: Option D. -> market efficiency
Answer: (d).market efficiency
Question 88. The form of market efficiency in which stock current prices reflect the volume information and historic prices of company is classified as
  1.    weak form of market efficiency
  2.    strong form of market efficiency
  3.    semi-strong form market efficiency
  4.    expensive form market efficiency
 Discuss Question
Answer: Option A. -> weak form of market efficiency
Answer: (a).weak form of market efficiency
Question 89. The intrinsic value of call option is
  1.    stock price ⁄ exercise price
  2.    stock price - exercise price
  3.    stock price + exercise price
  4.    stock price x exercise price
 Discuss Question
Answer: Option B. -> stock price - exercise price
Answer: (b).stock price - exercise price
Question 90. The difference between price of underlying asset and exercise price of option is classified as
  1.    extrinsic value of European option
  2.    intrinsic value of option
  3.    extrinsic value of option
  4.    intrinsic value of European option
 Discuss Question
Answer: Option B. -> intrinsic value of option
Answer: (b).intrinsic value of option

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