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1. Which of the following is True?
a. Long Put option provides the option to buy the underlying asset for the strike price at maturity.
b. Short Put option provides the option to sell the underlying asset for the strike price at maturity.
c. Long Put option provides the option to sell the underlying asset for the strike price at maturity.
d. All of the above
2. Which of the following is True?
a. Short Call option provides the option to sell the underlying asset for the strike price at maturity.
b. Long Call option provides the option to sell the underlying asset for the strike price at maturity.
c. Long Call option provides the option to buy the underlying asset for the strike price at maturity.
d. All of the above
3. Which of the following is True?
a. An American option can be worth more than the corresponding European option
b. European options are traded in Europe only
c. A European option can be worth more than the corresponding American option
d. None of the above
4. Holding other factors constant, what will happen to European option prices if time-tomaturity (T) increases?
a. Both Put option price and Call option price increase
b. Put option price increases and Call option price decreases
c. Put option price decreases and Call option price increases
d. None of the above
5. When speculators predict that the price of AAPL stock will decrease in the future, they should consider:
a. Long Put option on AAPL
b. Long Call option on AAPL
c. Short Put option on AAPL
d. None of the above
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