Options in Stock Markets Multiple Choice Questions with Answers – PDF Download

MCQ 1: 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

MCQ 2: 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

MCQ 3: 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

MCQ 4: 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

MCQ 5: 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