Finance Questions

Finance → Finance Questions from 81 to 85

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81. Which from the following statements is incorrect?
(A) A European option can only be exercised at expiry
(B) An American option can only be exercised at expiry
(C) A European option is a right but not obligation
(D) An American option is a right but not obligation

82. An agreement on a telephone or email to buy/sell an asset at an agreed future time for an agreed price is called
(A) spot contract
(B) forward contract
(C) future contract
(D) swap

83. When forward contract is traded on an exchange, it is called
(A) spot contract
(B) future contract
(C) call option
(D) put option

84. On 1 January you enter a contract to buy 1 million barrel of oil for $80 per barrel to be delivered on 1 March. The price on 1 March is $82 per barrel. Your gain is
(A) $200
(B) $20000
(C) $200000
(D) $2000000

85. Allocating stock in popular new issues to manager of their important corporate clients is called
(A) subscription
(B) under-performance
(C) rights
(D) spinning

ANSWERS: FINANCE QUESTIONS
81. (B) An American option can only be exercised at expiry
82. (B) forward contract
83. (B) future contract
84. (D) $2000000
85. (D) spinning