题目内容

Option investor D sells (writes, takes a SHORT position in) one of the following call options: Type of option: call option Underlying asset: 100 shares of Disney stock Exercise price: $40 per share Premium : $2.25 per share Expiration date : January The current market price of Disney stock is $39.02 per share. Investor D already owns 500 shares of Disney stock. Which of the following describes the amount of initial margin required for this transaction

A. Since the call option is "in the money" investor D is not required to deposit initial margin.
B. Since investor D owns at least 100 shares of Disney stock, he must deposit initial margin in the amount of 100% of the option premium.
C. Since investor D owns at least 100 shares of Disney stock, no additional margin is required.

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C. minimize default risk.

Financial derivatives also provide a powerful tool for limiting risks that individuals and firms face in the ordinary conduct of their business. This is an example of:

A. trading efficiency.
B. speculation.
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A. $1.00.
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Which of the following statements regarding a futures trade of a deliverable contract is FALSE

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B. The short is obligated to deliver the asset.
C. Equilibrium futures price is known only at the end of the trading day.

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