FIN 60804

FIN 60804

University

8 Qs

quiz-placeholder

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FIN 60804

FIN 60804

Assessment

Quiz

Business

University

Medium

Created by

kelvin lee

Used 3+ times

FREE Resource

8 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Mr J has a bullish outlook on the stock price movement. What is the possible option strategies he can apply?

Buying call options, selling put options, bull call spreads, bull put spreads
Buying put options
Selling call options
Bear call spreads

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a primary reason for a company to use futures contracts?

Hedging against price fluctuations
Diversifying investment portfolio
Reducing operational costs
Speculating on future price movements

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which strategy involves buying a futures contract at a lower price and selling it at a higher price to profit from price movements?

Long call

Arbitrage

Speculating

Hedging

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following factors is most likely to have a significant impact on the movement of a stock index?

Seasonal weather patterns

Changes in individual stock prices within the index

Localized events in a single small city

The personal spending habits of a single investor

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following factors is most likely to affect the price of Crude Palm Oil (CPO)?

Technological advancements in electronics

Changes in global soybean oil production

The launch of a new smartphone

Popularity of a new fashion trend

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following best describes a bull call spread strategy in options trading?

Buying a call option with a higher strike price and selling a call option with a lower strike price

Buying a call option and selling a put option with the same strike price

Buying a call option with a lower strike price and selling a call option with a higher strike price

Selling a call option and buying a put option with the same strike price

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Mr. A buys a call option (strike price of $3) with a premium of $0.50. Given that the stock price at maturity is $2.50, what is the possible gain/loss?

Gain $1

Gain $0.50

Loss $1

Loss $0.50

8.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Mr. A buys a put option (strike price of $3.50) with a premium of $0.50. Given that the stock price at maturity is $2.50, what is the possible gain/loss?

Gain $1

Gain $0.50

Loss $1

Loss $0.50