Question
Which of the following is true? A. An American option can be exercised only at maturity. B. To become the short party of an option
Which of the following is true?
A. | An American option can be exercised only at maturity. | |
B. | To become the short party of an option contract, you have to pay the option premium to the opposite party. | |
C. | A put option will be exercised if at maturity the underlying asset price is less than the strike price. | |
D. | A short position in a call gives you the right to buy the underlying asset. |
Which of the following is not true?
A. | Forwards and futures are agreements to buy or sell the underlying asset at maturity at a pre-specified price. | |
B. | Forward contracts are traded on exchanges, but futures contracts are not. | |
C. | Forwards can be customized. | |
D. | In a spot contract, you can buy or sell an asset immediately. |
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