Multiple Choice
1. Option striking prices are normally at
a. $2 intervals.
b. $5 intervals.
c. $7 intervals.
d. $10 intervals.
2. An option whose ticker ends in CH is a
a. March 25 call.
b. March 25 put.
c. March 40 call.
d. March 40 put.
3. An option whose ticker symbol ends in OC is a
a. March 15 call.
b. March 15 put.
c. March 25 call.
d. March 25 put.
4. An exchange employee who makes sure small public orders get filled quickly is the
a. Order Book Official.
b. Ombudsman.
c. Trade Checker.
d. Flow Manager.
5. Options are not normally
a. exercised early.
b. exercised after expiration.
c. exercised when out-of-the-money.
d. All of the above
6. In a profit and loss diagram,
a. the bend occurs at the stock price.
b. the bend occurs at the striking price.
c. there is a bend at both the stock price and the striking price.
d. the bend occurs at the maximum profit.
7. If you write a naked call,
a. the maximum profit is unlimited.
b. the maximum loss is unlimited.
c. the maximum loss equals the premium.
d. the maximum loss equals the stock price minus the striking price.
8. If you write a put option,
a. the maximum profit is unlimited.
b. the maximum loss is unlimited.
c. the maximum gain equals the premium.
d. the maximum gain equals the stock price minus the striking price.
9. OEX is symbolic for
a. order expiration.
b. the S&P 100 stock index options.
c. order execution.
d. the S&P 500 futures contract.
10. LEAPS are issued with durations of all of the following except __________.
a. 1 year
b. 2 years
c. 3 years
d. 10 years