CSU FIN 310 Exam 3 UPDATED ACTUAL Questions And Correct Answers
Terms in this set (102)
, A __ grants the owner the right to purchase a specified call option
financial instrument for a specified price within a
specified period of time.
A __ requires a premium above and beyond the price to call option and put option
be paid for the financial instrument.
A call option is "in the money" when the market price of the underlying security exceeds the exercise price.
A put option is "out of the money" when the market price of the security exceeds the exercise price.
When the market price of the underlying security call option is in the money.
exceeds the exercise price, the
When the exercise price exceeds the market price of the put option is in the money.
underlying security, the
Sellers (writers) of call options can offset their position at buying identical call options.
any point in time by
The __ is the most important exchange for trading Chicago Board of Options Exchange (CBOE)
options.
The Options Clearing Corporation (OCC) serves as a True
guarantor on option contracts traded in the United
States.
____ execute transactions desired by investors and trade Market-makers
stock options for their own account.
A speculator buys a call option for $3, with an exercise $2
price of $50. The stock is currently priced at $49, and
rises to $55 on the expiration date. The speculator will
exercise the option on the expiration date (if it is feasible
to do so). What is the speculator's profit per unit?
A speculator buys a call option for $3, with an exercise $53
price of $50. The stock is currently priced at $49, and
rises to $55 on the expiration date. What is the stock
price at which the speculator would break even?
A speculator purchases a put option for a premium of $4, $3
with an exercise price of $30. The stock is presently
priced at $29, and rises to $32 before the expiration date.
What is the maximum profit per unit to the speculator
who owned the put option assuming he or she exercises
the option at the ideal time?
Terms in this set (102)
, A __ grants the owner the right to purchase a specified call option
financial instrument for a specified price within a
specified period of time.
A __ requires a premium above and beyond the price to call option and put option
be paid for the financial instrument.
A call option is "in the money" when the market price of the underlying security exceeds the exercise price.
A put option is "out of the money" when the market price of the security exceeds the exercise price.
When the market price of the underlying security call option is in the money.
exceeds the exercise price, the
When the exercise price exceeds the market price of the put option is in the money.
underlying security, the
Sellers (writers) of call options can offset their position at buying identical call options.
any point in time by
The __ is the most important exchange for trading Chicago Board of Options Exchange (CBOE)
options.
The Options Clearing Corporation (OCC) serves as a True
guarantor on option contracts traded in the United
States.
____ execute transactions desired by investors and trade Market-makers
stock options for their own account.
A speculator buys a call option for $3, with an exercise $2
price of $50. The stock is currently priced at $49, and
rises to $55 on the expiration date. The speculator will
exercise the option on the expiration date (if it is feasible
to do so). What is the speculator's profit per unit?
A speculator buys a call option for $3, with an exercise $53
price of $50. The stock is currently priced at $49, and
rises to $55 on the expiration date. What is the stock
price at which the speculator would break even?
A speculator purchases a put option for a premium of $4, $3
with an exercise price of $30. The stock is presently
priced at $29, and rises to $32 before the expiration date.
What is the maximum profit per unit to the speculator
who owned the put option assuming he or she exercises
the option at the ideal time?
