A. Which of these is true about exchange traded options: a. Price discovery takes place through a…

A. Which of these is true about exchange traded options:

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a. Price discovery takes place through a bilateral auction process

b. They have a finite life span

c. There is no limit on the number of contracts that can be traded

d. All of the above

B. Which of these models for interest rates exhibits mean reversion:

a. The CIR model

b. The Vasicek model

c. The Ornstein-Uhlenbeck process

d. All of the above

C. An interest rate collar requires:

a. A long position in a cap

b. A long position in a floor

c. Both (a) and (b)

d. None of the above

D. An interest rate collar requires:

a. A long position in a cap

b. A short position in a floor

c. Both (a) and (b)

d. None of the above

E. A foreign currency is like:

a. A non-dividend paying stock

b. A stock paying a constant dividend

c. A stock paying a continuous dividend yield

d. None of the above

F. Which of these will lead to an inflow for the holder if exercised:

a. A futures call option

b. A futures put option

c. Both (a) and (b)

d. None of the above

G. An American call on a futures contract:

a. Will never be exercised early

b. May be exercised early

c. Will be equal in value to a European call with the same terms

d. None of the above

H. Which of these options may be exercised early:

a. American call futures options

b. American put futures options

c. Both (a) and (b)

d. Neither (a) nor (b)

I . A portfolio insurance strategy may be implemented using:

a. Futures contracts

b. Put options

c. Call options

d. All of the above