A. low potential of losses
B. high potential of losses
C. high potential of profit
D. low potential of profit
Related Mcqs:
- Consider buying the call option, if the price of stock falls then the buyer of call option has ___________?
A. high potential of profit
B. low potential of profit
C. low potential of losses
D. high potential of losses - If the stock price of call option is $300 and the exercise price of call option is $260 then the intrinsic value of option is ___________?
A. 260
B. 560
C. 40
D. 300 - Consider buying the put option, if the price is lower at the expiration date of option then the ____________?
A. liquidity will be higher
B. loss will be higher
C. profit will be lower
D. profit will be higher - Consider the call option writing, the probability that a buyer would have positive payoff increases with the ___________?
A. increase in stock price
B. decrease in stock price
C. increase in maturity duration
D. decrease in maturity duration - Consider the buying of put option, the probability that a buyer would have negative payoff increases with the ___________?
A. increase in stock price
B. decrease in stock price
C. increase in maturity duration
D. decrease in maturity duration - If the intrinsic value of an option is $450 and the price of an option is $560 then the time value of an option is __________?
A. 110
B. 1010
C. 450
D. 560 - The type of option that gives the right to buyer to sell the underlying option at specific exercise price is considered as _____________?
A. call option
B. put option
C. European option
D. Australian option - The type of option that gives the right to buyer to buy the underlying option at specific exercise price is considered as _________?
A. European option
B. Australian option
C. call option
D. put option - If the time value of an option is $200 and the intrinsic value of an option is $250 then the price of option is _________?
A. 50
B. 550
C. 200
D. 250 - The intrinsic value of option is $280 and the price of option is $350 then the time value of option is ___________?
A. 125
B. 135
C. 280
D. 70
