QTRR c10

Which of the following describes a call option?

• The right to buy an asset for a certain price

• The obligation to buy an asset for a certain price

• The right to sell an asset for a certain price

• The obligation to sell an asset for a certain price

Which of the following is true?

• A long call is the same as a short put

• A short call is the same as a long put

• A call on a stock plus a stock is the same as a put

• None of the above

An investor has exchange-traded put options to sell 100 shares for $20. There is a 2 for 1 stock split. Which of the following is the position of the investor after the stock split?

• Put options to sell 100 shares for $20

• Put options to sell 100 shares for $10

• Put options to sell 200 shares for $10

• Put options to sell 200 shares for $20

An investor has exchange-traded put options to sell 100 shares for $20. There is 25% stock dividend. Which of the following is the position of the investor after the stock dividend?

• Put options to sell 100 shares for $20

• Put options to sell 75 shares for $25

• Put options to sell 125 shares for $15

• Put options to sell 125 shares for $16

An investor has exchange-traded put options to sell 100 shares for $20. There is a $1 cash dividend. Which of the following is then the position of the investor?

• The investor has put options to sell 100 shares for $20

• The investor has put options to sell 100 shares for $19

• The investor has put options to sell 105 shares for $19

• The investor has put options to sell 105 shares for $19.05

Which of the following describes a short position in an option?

• A position in an option lasting less than one month

• A position in an option lasting less than three months

• A position in an option lasting less than six months

• A position where an option has been sold

Which of the following describes a difference between a warrant and an exchange-traded stock option?

• In a warrant issue, someone has guaranteed the performance of the option seller in the event that the option is exercised

• The number of warrants is fixed whereas the number of exchange-traded options in existence depends on trading

• Exchange-traded stock options have a strike price

• Warrants cannot be traded after they have been purchased

Which of the following is an example of an option class?

• All calls on a certain stock

• All calls with a particular strike price on a certain stock

• All calls with a particular time to maturity on a certain stock

• All calls with a particular time to maturity and strike price on a certain stock

Which of the following is an example of an option series?

• All calls on a certain stock

• All calls with a particular strike price on a certain stock

• All calls with a particular time to maturity on a certain stock

• All calls with a particular time to maturity and strike price on a certain stock

Which of the following must post margin?

• The seller of an option

• The buyer of an option

• The seller and the buyer of an option

• Neither the seller nor the buyer of an option