(CMSA) UNDERSTANDING OPTIONS EXAM QUESTIONS AND ANSWERS WITH COMPLETE VERIFIED SOLUTIONS GRADED A++
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Module
CMSA
Institution
CMSA
(CMSA) UNDERSTANDING OPTIONS EXAM QUESTIONS AND ANSWERS WITH COMPLETE VERIFIED SOLUTIONS GRADED A++
Define Future/Forward
Obligation to deliver or take delivery of an underlying asset
- Quantity and quality is agreed today at a fixed price for a certain delivery day in the future
- Can be cash ...
Obligation to deliver or take delivery of an underlying asset
- Quantity and quality is agreed today at a fixed price for a certain delivery day in the future
- Can be cash settled or based upon other derivatives
- Forwards & Futures carry an obligation
Define Option
The right but not the obligation to buy (Call) or sell (Put) the underlying asset on or before a certain day
in the future
Define Call
Buy
Long Call - Option to buy
Short Call - Obligation to buy if called
Define Put
, Sell
Long Put - Option to sell
Short Put - Obligation to sell if called
Warrants are a type of __
Option
A buyer of a option is also called the __
Holder
A seller of an option is also called the __
Writer
What is Put Holder?
Long Put; Right to sell
What is a Put Writer?
Short Put; Obligated to buy
What is a Call holder?
Long Call; Right to buy
What is a Writer of a call?
Short Call; obligated to sell
Define Lot size
Show the amount that 1 option contract represents
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