Question
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
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
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