Symposium Quiz
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Which of the following does not affect the Option Premium
Interest Rate
Volatility
Dividend
Inflation
Riya sold a call option contract for a premium of Rs. 8. The strike price of option is 50 and the current market price is Rs. 45. On expiration the price of the stock is Rs.65. if the option holder exercises the option, total profit or loss will be Rs. ____?
-8
0
-15
7
-7
Rahul bought an 80 Strike CE at 5 and simultaneously sold a 90 Strike CE at 3. What is his break-even point?
90
85
82
92
How increase in volatility affects the OTM Option Delta?
No affect
Delta Increase
Delta Decreases
Fear in the Market is increasing & a fall is expected. Which of the following strategy will give us an edge?
Short Call
Long Put
Bull Put Spread
Bear Put Spread
Ratio Put Spread
Which of the following options (on the same expiry) has the largest Vega when the stock is trading at 100?
Put on the 100 strike
Call on the 120 strike
Call on the 80 strike
Put on the 120 strike
Ashok buys a 50-strike put on an index when the market price of the index is also 50. The premium for the put is 5. Assume that the option contract is for an underlying 100 units of the index. Calculate the customer’s profit if the index declines to 45 at expiration.
-1000
-500
0
500
1000
An investor has written a covered call. Determine which of the following represents the investor’s position.
Short the call and short the stock
Short the call and long the stock
Short the call and no position on the stock
Long the call and short the stock
Long the call and long the stock
Aditi purchased Option A and Option B for a certain stock today, with strike prices 70 and 80, respectively. Both options are European one-year put options. Determine which statement is true about the moneyness of these options, based on a particular stock price.
If Option A is in-the-money, then Option B is in-the-money.
If Option A is at-the-money, then Option B is out-of-the-money
If Option A is in-the-money, then Option B is out-of-the-money.
If Option A is out-of-the-money, then Option B is in-the-money
If Option A is out-of-the-money, then Option B is out-of-the-money
Ishaan believes that the volatility of a stock would be higher than indicated by market prices for options on that stock. She wants to speculate on that belief by buying or selling at-the-money options. Determine which of the following strategies would achieve Ishaan’s goal.
Buy a Strangle
Buy a Straddle
Sell a Straddle
Sell a Butterfly Spread
Buy a Butterfly Spread