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QUIZ ON FUTURE AND OPTIONS
DEBT Funds
FUTURE & OPTIONS
MUTUAL FUNDS
STOCK MARKET
All Questions are Mandatory.
01.
If an option’s trader expect that interest rates will decrease they should buy Eurodollar Put options. ?
True
False
None of the above
02.
If long Put options are exercised, the buyer of the put will be assigned a Short Future ?
True
False
None of the above
03.
One of your clients "Solid Investment Company", a securities dealer, has a large position in long-term U.S. Treasury Bonds maturing in 2023. The company wants to hedge these bonds by using options on bond futures. How should the dealer hedge? ?
Short calls
Short puts
Long calls
Long puts
04.
If an option on an underlying futures contract is in-the-money, the premium for the option will move dollar for dollar with the movement of the underlying future’s price ?
True
False
None of the above
05.
The value of a purchased stock portfolio would be best protected or hedged by which of the following ?
An appropriate hedge would be long S&P puts
An appropriate hedge would be long S&P calls.
An appropriate hedge would be short S&P futures.
An appropriate hedge would be both answers A and C
06.
In order to hedge using options on T-Bond futures, a person who thinks interest rates will increase should ?
Buy calls
Write puts
Either buy puts or write calls
Buy calls and write puts
07.
If long Call options are exercised the buyer of the call will be assigned a Long Future ?
True
False
None of the above
08.
A synthetic long put is an equivalent combination of a short futures contract and a long call option ?
True
False
None of the above
09.
The amount the option price premium changes relative to the percentage change in price in the underlying future is called ?
the Standard Deviation
the Coefficient of Variation
the volatility factor
the Delta
10.
You are reviewing the prices of several T-bond futures call options and you note that the market price of one of the upcoming November T-bond futures is 90-00. The strike price on the option is 95-16/32. This future call option is in-the-money ?
True
False
none of the above
11.
Which of the following positions is referred to as a synthetic put ?
short a call/long the futures
short a call/short the futures
long a call/short the futures
long a call/long the futures
12.
If a speculator expects a substantial increase in the volatility of a future but was unsure of the direction of the move, they would likely establish a Long Straddle using options ?
True
False
None of the above
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