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
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
In financial planning, most high option price will lead to__________?
(A) Longer option period
(B) Smaller option period
(C) Lesser price
(D) Higher price
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
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
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
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
According to Black Scholes model, selling and buying of stock have_______?
(A) Discount rate
(B) Transaction costs
(C) No transaction costs
(D) No discounts
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%
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