Derivatives Dealers(4)

Q1-Which of the following is true ?

1. An american option can be exercised on an american option exchange 
2. An american option can be exercised on the expiration date.
3. An american option can be exercised on before the expiration date
4. An american option can be exercised on or before the expiration date. 

Q2-Expiration date is the date on or before which the option must be exercised

1. True
2. False
3. true only on USA
4. True only on japan 

Q3-The black-scholes model is used for the pricing of

1. Index futures 
2. option 
3. Equity share
4. Corporate debt 

Q4-A stock option is example of a

1. Commodity
2. Derivative instrument
3. Money market instrument
4. Foreign exchange contract

Q5-Who can write the option ?

1. Only market makers 
2. Only FIIS 
3. Any person  whether he owns underlying stock or not 
4. Any person owing underlying stock 

Q6-Selling long on the stock means ....

1. Seller does not own the stock he is suppose to deliver 
2. seller has to deliver the stock after a long time 
3. seller owns the stock  he is suppose to deliver  
4. seller  has to deliver the stock along with interest 

Q7-Purchase of a call option has expectation that stock price will

1. Increase 
2. Decrease 
3. Remain constant
4. None of the above 

Q8-Exercise price of option are specified by-

1.  Government 
2. Company 
3. Market makers 
4. Exchange

Q9-If you have bought a future contract and price drops , you will be making a profit.

1. True 
2. False 
3. Sometimes true
4. Some times false

Q10-The greater the number of participants in any market , generally lower the liquidity .

1. True 
2. False
3. True only for the year 2002
4. True only for the year 2001