Finance Mcqs

An option that gives investors right to sell a stock at predefined price is classified as____________?

(A) Put option
(B) Call option
(C) Money back options
(D) Out of money options

Submitted By :Ali Uppal

An increase in value of option leads to low present value of exercise cost only if it has____________?

(A) Low volatility
(B) Interest rates are high
(C) Interest rates are low
(D) High volatility

Submitted By :Ali Uppal

In financial planning, most high option price will lead to__________?

(A) Longer option period
(B) Smaller option period
(C) Lesser price
(D) Higher price

Submitted By :Ali Uppal

An investor who writes stock call options in his own portfolio is classified as__________?

(A) Due option
(B) Covered option
(C) Undue option
(D) Uncovered option

Submitted By :Ali Uppal

An investor who buys shares and writes a call option on stock is classified as__________?

(A) Put investor
(B) Call investor
(C) Hedger
(D) Volatile hedge

Submitted By :Ali Uppal

Greater value of option, larger span of time value is usually results in__________?

(A) Shorter call option
(B) Longer call option
(C) Longer put option
(D) Shorter put option

Submitted By :Ali Uppal

If current price increases from lower to higher then an____________?

(A) Option value equal to one
(B) Option value will increase
(C) Option value will decrease
(D) Option value equal to zero

Submitted By :Ali Uppal

According to Black Scholes model, selling and buying of stock have_______?

(A) Discount rate
(B) Transaction costs
(C) No transaction costs
(D) No discounts

Submitted By :Ali Uppal

Cost of common stock is 16% and bond yield is 9% then bond risk premium would be_________?

(A) 7%
(B) 8%
(C) 1.78%
(D) 25%

Submitted By :Ali Uppal

Cost which has occurred already and not affected by decisions is classified as______________?

(A) Sunk cost
(B) Occurred cost
(C) Weighted cost
(D) Mean cost

Submitted By :Ali Uppal

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