Financial Options Online Exam Quiz

Important questions about Financial Options. Financial Options MCQ questions with answers. Financial Options exam questions and answers for students and interviews.

According to the Black Scholes model, the stocks with the call option pays the

Options

A : a. dividends

B : b. no dividends

C : c. current price

D : d. past price

An exercise of option in future and the part of option call value depends specifically on

Options

A : a. PV of exercising cost

B : b. FV of exercising cost

C : c. PV of cost volatility

D : d. FV of cost volatility

The yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an

Options

A : a. option closing price

B : b. option beginning price

C : c. option expiration

D : d. option model

The long-term equity anticipation security is usually classified as

Options

A : a. short-term options

B : b. long-term options

C : c. short money options

D : d. yearly call

The types of option markets do not include

Options

A : a. European option

B : b. American option

C : c. expiry option

D : d. covered options

In binomial approach of option pricing model, the value of stock is subtracted from call option obligation value to calculate

Options

A : a. current value of portfolio

B : b. future value of portfolio

C : c. put option value

D : d. call option value

According to exercise value and option price, the market value of the option will be zero when

Options

A : a. stock price is maximum

B : b. option price is zero

C : c. stock price is zero

D : d. stock price is minimum

An excess of actual price of option over an exercise value of option is classified as

Options

A : a. time value options

B : b. actual options

C : c. estimated options

D : d. optional pricing

At the last day when the European and American option can be exercised is classified as

Options

A : a. European date

B : b. American date

C : c. expiration date

D : d. money date

The current value of stock in portfolio with current option price $20 is $50, then present value of portfolio would be

Options

A : a. 30

B : b. 70

C : c. 0.0167

D : d. 0.3

The situation in financial options in which the strike price is less than current price of stock is classified as

Options

A : a. in-the-money

B : b. out-of-the-money

C : c. out-of-the-portfolio

D : d. in-the-portfolio

In put call parity relationship, the present value of exercise price is added to call option which is equal to

Options

A : a. put option stock

B : b. call option + stock

C : c. call option + market price

D : d. put option + market price

An option that gives investors the right to sell a stock at predefined price is classified as

Options

A : a. put option

B : b. call option

C : c. money back options

D : d. out of money options

The value of stock is $250 and the call option obligation is $100 then the current value of portfolio would be

Options

A : a. 0.35 times

B : b. 150

C : c. 350

D : d. 2.5

In binomial approach of option pricing model, the fourth step is to create

Options

A : a. equalize the domain of payoff

B : b. equalize the ending price

C : c. riskless investment

D : d. high risky investment

The current value of portfolio is $550 and to cover an obligation of call option is $200 then the value of stock would be

Options

A : a. 350

B : b. 0.0275

C : c. 750

D : d. 2.75 times

According to the Black Scholes model, the purchaser can borrow fraction of security at risk free interest rate which is

Options

A : a. short term

B : b. long term

C : c. transaction cost

D : d. no transaction cost

The type of option which cannot be exercised before an expiry date which is classified as

Options

A : a. European option

B : b. American option

C : c. Australian option

D : d. money option

In put call parity relationship, the put option minus call option in addition with stock is equal to

Options

A : a. exercise price present value

B : b. exercise price future value

C : c. time line value

D : d. time value of bond

The current option is $800 and the current value of stock in portfolio is $1900 then the present value of portfolio would be

Options

A : a. ?$1100

B : b. 2700

C : c. 1100

D : d. ?$2700

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