chapter 4 Quiz

chapter 4 Quiz

Professional Development

25 Qs

quiz-placeholder

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chapter 4 Quiz

chapter 4 Quiz

Assessment

Quiz

Financial Education

Professional Development

Easy

Created by

Shatrujeet Singh

Used 1+ times

FREE Resource

25 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which financial instrument allows market participants to ride the upside while restricting the downside?

Forward contracts

futures contract

options contract

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the distinguishing feature of a call option?

It gives the holder the right to sell the underlying asset.

It has unlimited profit potential for the seller.

It gives the holder the right to buy the underlying asset.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of an opening purchase transaction in options trading?

To create or increase a short position

To reduce or eliminate an existing position

To create or increase a long position

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is the premium for an option calculated?

It is determined by the spot price of the underlying asset.

It is equal to the strike price multiplied by the lot size.

It is the price paid by the option seller to the option buyer.

It is the price paid by the option buyer to the option seller.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How many trading cycles are typically available for stock options on the NSE?

one month

two months

three months

four months

6.

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

If the total premium for a Nifty option contract is Rs 10,000 and the contract size is 50, what is the option premium per unit?

150

200

250

300

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What characterizes an at-the-money (ATM) option?

It has a strike price higher than the spot price.

It has zero intrinsic value.

It gives the option holder a positive cash flow if exercised immediately.

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