Stock market Questions And Answers

QUESTIONS AND ANSWERS ON CHAPTER

Q. Which of the following cannot be an underlying asset for financial derivative contract ?

1. Equity Index
2. Commodities 3.Interestrat£

4.. Foreign Exchange A. The correct answer is NO.2.       •

Q. In an option contract, the option lies with the

1. Buyer
2. Seller
3. Both
4. Exchange

A. The correct answer is NO.2.

1. Chicago Board of Trade.
2. Chicago Mercantile Exchange
3. Chicago Board Options Exchange
4. London International Financial Futures and options Exchange.

A. The correct answer isNo.2

Q. Spot value of Nifty is 2140. An investor buys a 1 month Nifty 2157 call option for a premium of Rs.7. The option is

1. In the Money            2. At the Money
2. Out of the Money 4. None of the above A. The correct Answer is NO.3.

Q. A Call option at a strike of Rs. 176 is selling at a premium of Rs. 18. At what price will it breakeven for the buyer of the option ?

1. Rs.196                       2. Rs.204
2. Rs.187                       3.RS.194

A. To recover the option premium of Rs. 18, the spot will have to rise to 176+18. So correct answer is 4.

Q. Spot value of S&PCNX NIFTY is 2200. An investor bought a one month S&P CNX Nifty 2200 call option for a premium of Rs. 10. The opti on i s