Intrinsic value of put option is?
A. exercise price – stock price
B. exercise price x stock price
C. exercise price ⁄ stock price
D. exercise price + stock price
FINANCE MCQS
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The firm in which the different voting rights are assigned for different classes of stock is classified as?
A. dual class firm
B. One class firm
C. divided class firm
D. sub class firm
Price of underlying asset is added into intrinsic value of option to calculate?
A. book value of option
B. spot price of option
C. exercise price of option
D. forward price of option
The pre-specified price at which the underlying asset is bought and sold is called as?
A. strike price
B. exercise price
C. maturity price
D. B and C
Margin which must be maintained as soon as futures contract takes place is classified as?
A. futures margin
B. forwards margin
C. spot margin
D. maintenance margin
Process in which the group of investment banks distribute the securities is classified as?
A. investment groups
B. securitize groups
C. task groups
D. syndicate
Type of financial security whose payoff is linked to any other security is called?
A. non-derivate security
B. derivate security
C. strong security
D. semi-strong security
A swap that is used to evade the risk of exchange rate exists because of currency mismatching is classified as?
A. currency swaps
B. notion swaps
C. floating swaps
D. fixed swaps
Preferred stock is considered as hybrid security because it includes?
A. fixed periodic payment
B. higher liquidity
C. representation of ownership interest
D. A and B
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. 70
B. 98
C. 110
D. 125