OTC's are traded "over the counter", between private parties.

Check any that apply for OTC markets and Exchanges.

a. OTC stands for On the Cash securities.

b. OTC stands for Over the Counter securities.

c. Trading on an exchange is "centralized": everyone deals just with the exchange.

d. OTC stands for Over the Counter securities.

e. Exchanges are the only places where forwards are traded.

A call option's strike is $5, and the value of the underlying ends up at $7. What's the profit for a buyer of a call?

Select one:

a. $8

b. $2

c. -$2

d. $5

e. -$3