Options in Stock Markets MCQ (Multiple Choice Questions) PDF Download

Consider the buying of put option, the probability that a buyer would have negative payoff increases with the

1. increase in stock price
2. decrease in stock price
3. increase in maturity duration
4. decrease in maturity duration

When the price of underlying asset increases then the good option is

1. buy the call option
2. sell the call option
3. buy the put option
4. sell the put option

Consider the call option writing, the probability that a buyer would have positive payoff increases with the

1. increase in stock price
2. decrease in stock price
3. increase in maturity duration
4. decrease in maturity duration

The up-front fee which must be paid by the buyer to the seller is called

1. call premium
2. discount premium
3. strike premium
4. exercise premium

The type of option that can be exercised only at the date of expiration is classified as

1. European option
2. Canadian option
3. Australian option
4. American option