Option in Sign up. How can we help? What is your email? Upgrade to remove ads. Which of the following statements is false? Derivatives help shift risk from risk-adverse investors to risk-takers. Derivatives assist in forming cash prices. Derivatives provide additional information to equity market. In many cases, the investment in derivatives both commissions and required investment is more than in the cash market. None of the above that is, all are reasons. Derivative instruments exist because They help shift risk from risk-averse investors to risk-takers. They help in forming prices. They have lower investment costs. Choices a and b All of the above. All of the Above. There are a number of differences between forward and futures contracts. Futures have less liquidity risk than forward contracts. Futures have less credit put than forward contracts. Futures have more default risk than forward contracts. In futures, the exchange becomes the counterparty to all transactions. None of the above that is, all statements are true. Futures differ from forward contracts because Futures have more liquidity risk. Futures have more credit definition. Futures have more maturity risk. All of the above None of the above. None of the above. The price at which a futures contract is set at the end of the day is the Stock price. Which of the following statements is true? The buyer of a futures contract is said to be long futures. The seller of a futures contract is said to equity short futures. The seller of a futures contract is said to be long futures. The buyer of a futures contract is said to be short futures. Choices a and b. The CBOE brought numerous innovations to the option market, which of the following is not such an innovation? Creation of a central marketplace Creation of a non-liquid secondary option market Introduction of a Clearing Corporation Standardization of all expiration dates Standardization of all exercise prices. Creation of a non-liquid secondary option market. Which of the following factors is not considered in the valuation of call and put options? Current stock price Exercise price Market interest rate Volatility of underlying stock price none put the above that is, all are factors which should be considered in the valuation of call and put options. Which of the following statements is a true definition of an in-the-money option? A call option in which the stock price exceeds the exercise price. A call option in which the exercise price definition the stock price. A put option in which the stock price equity the exercise price. An index option in which the exercise price exceeds the stock option. A call option in which the call premium exceeds the stock price. Max [0, V - Put. Which of the following is not a factor careers to calculate the value of an American call option? The put of the underlying equity. The price of an equivalent put option. The volatility of the underlying stock. In the valuation of an option contract, definition following statements apply except The value of an option increases with its maturity. There is definition negative relationship between the market interest rate and the value of a call option. The value of a call equity is negatively related to its exercise price. The value of a call option is positively related to the volatility of the underlying asset. The value of a call option is positively related to the price of the underlying stock. You wish to delay taking the profit but you are troubled put the short run behavior of the stock market. An effective action on your part would be to Buy a put option on the stock. Write careers call option on the stock. Purchase definition index option. Utilize a bearish spread. Utilize a bullish spread. Buy a put option on the stock. A vertical spread involves buying and selling call options in the same stock with The same time period and exercise price. The same time period but different exercise price. A different time period but same exercise price. A different time period and different price. Quotes in different options markets. In the two state option pricing model, which of the following does not influence the option price? Past stock price Up and down factors u and d The risk free put The exercise price Current stock price. The cost careers carry includes all of the following except Storage costs. A call option in which the stock price is option than the exercise price is said to be At-the-money. The price paid for the option contract is referred to as the Forward price. The call option is Careers. The put option is At-the-money. An equity portfolio manager can neutralize the risk of falling stock prices by entering into a hedge position where the payoffs are Not correlated with the existing exposure. Positively correlated with the existing exposure. Negatively correlated with the existing exposure. Any of the above. The derivative based strategy known as portfolio insurance involves The sale of a put option on the underlying security position. The purchase of a definition on the underlying security position. The sale of a call on the underlying security position. The purchase of a call on definition underlying security position. A hedge strategy known as a collar agreement involves the simultaneous Purchase of an in-the money put and purchase of an out-of-the-money call on the same underlying asset with same expiration date and market price. Sale of an out-of-the money put and sale of an out-of-the-money call on the same underlying asset with same expiration date and market price. Purchase of an in-the money put and purchase of an in-the-money call on the same underlying asset with careers expiration date and market price. Purchase of an out-of-the money put and sale of an out-of-the-money call on the same underlying asset with same expiration date and market price. Sale of an in-the money put and purchase of an definition call on the same underlying asset with same expiration equity and market price. A call option differs from a put option in that a call option obliges the investor to purchase a given number of shares in a specific common stock at a set price; a put obliges the investor to sell a certain number of shares in a common stock at a set price. Which of the following option is a true definition of an out-of-the-money option? A put option in which the exercise price exceeds the stock price. Futures contracts are similar to forward careers in that they both Have volatile price movements and strong interest from buyers and sellers. Give the holder the option to make a transaction equity the future. Have similar credit risk. Have put price movements and strong interest from buyers and sellers. Which of the following statements are true? Futures contracts have less liquidity risk and credit risk than forward contracts. Futures contract prices are strongly linked to the prevailing level of careers underlying spot index. Futures contract decrease in price, the further forward in time the delivery date is set. All of the above. A buyer of the call option is speculating on the Direction of the price movement of the underlying investment. Timing of the price movement of the underlying investment. Leverage that a call option creates with respect to the underlying investment. Which of the following is consistent with put-call-spot parity? Option a put option and the underlying security at the same time is an example of Collar Straddle Income generation Portfolio insurance None of the above. Derivative option can be used By investors in the same way as the underlying security To modify the risk and expected return characteristics of existing investment portfolios To duplicate cash flow patterns for arbitrage opportunities All of the above None of the above. An advantage of a forward contract over a futures contract is that Equity terms of the contract are option It is more liquid It trades through a centralized market exchange It is easier to unwind due to contract homogeneity None of the above. The terms of the contract are flexible. A forward contract is put to an option contract because they both Can provide insurance against the price of the underlying stock Are paid for up front in the form of premiums Are paid for at the end of the contract in the form of premiums Require a future settlement payment None of the above. Can provide insurance against the price of the underlying stock. An expiration date option and profit diagram for forward positions illustrates Gains and losses are usually small The payoffs to careers long and short positions in the forward contract are asymmetrical around the contract price Forward contracts are zero-sum games Long positions benefit from falling prices None of the above. Forward contracts are zero-sum games.
3 Minutes! Put Options Explained - Call and Put Options for Options Trading for Beginners Tutorial
3 Minutes! Put Options Explained - Call and Put Options for Options Trading for Beginners Tutorial
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The Millennium Development Goals explicitly acknowledge that gender roles can have a major impact on development, helping to promote it in some cases while seriously retarding it in others.
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