Classical

Advanced Questions - Section 4

6:  

The maximum loss of a call option holder is equal to

A.

Strike-Spot Price

B.

Spot Price

C.

Premium

D.

So + Premium

 
 

Option: C

Explanation :


7:  

Commercial paper is a type of

A.

Fixed coupon Bond

B.

Unsecured short-term debt

C.

Equity share capital

D.

Government Bond

 
 

Option: B

Explanation :


8:  

A contract which gives the holder a right to buy a particular asset at a particular rate on or before a specified date is known as

A.

European Option

B.

Straddle

C.

American Option

D.

Strangle

 
 

Option: C

Explanation :


9:  

Which of the following is not incorporated in Capital Budgeting?

A.

Tax-Effect

B.

Time Value of Money

C.

Required Rate of Return

D.

Rate of Cash Discount.

 
 

Option: D

Explanation :


10:  

The maximum loss of a put option writer is equal to

A.

Strike Price - Premium

B.

Strike Price

C.

Spot Price

D.

Strike Price plus premium

 
 

Option: A

Explanation :




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