Which of the following European options can be used to construct a calendar spread?

Options	Option type	Strike price	Maturity
Option 1	call	10	0.5 years
Option 2	call	10	1 year
Option 3	put	20	0.5 years
Option 4	put	20	1 year

a.

short Option 1 and long Option 2

b.

short Option 3 and short Option 4

c.

short Option 1 and long Option 3

d.

long Option 1 and short Option 2

Compared to options written on commodities, options on commodity futures are more popular for which of the following reasons?

I. futures contracts are more liquid.

II. futures options holders can choose between cash settlement and asset delivery settlement.

III. futures price is known immediately from trading on the futures exchange.

a.

I and II only.

b.

I only

c.

II only

d.

I and III only.

Which of the following derivative contracts cannot be traded in the over-the-counter market?

a.

futures

b.

forwards

c.

European options

d.

American options