Financial Management MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15

1.
In binomial approach of option pricing model, fourth step is to create

A. equalize domain of payoff

B. equalize ending price

C. riskless investment

D. high risky investment

Answer & Solution Discuss in Board Save for Later

2.
Current value of portfolio is Rs 550 and to cover an obligation of call option is Rs 200 then value of stock would be

A. Rs 350.00

B. Rs 275.00

C. Rs 750.00

D. Rs 1,000.00

Answer & Solution Discuss in Board Save for Later

3.
According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is

A. short term

B. long term

C. transaction cost

D. no transaction cost

Answer & Solution Discuss in Board Save for Later

4.
Type of option which cannot be exercised before an expiry date which is classified as

A. European option

B. American option

C. Australian option

D. money option

Answer & Solution Discuss in Board Save for Later

5.
Input call parity relationship, put option minus call option in addition with stock is equal to

A. exercise price present value

B. exercise price future value

C. time line value

D. time value of bond

Answer & Solution Discuss in Board Save for Later

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Financial Management MCQ Questions and Solutions with Explanations | Commerce

1. In binomial approach of option pricing model, fourth step is to create

Answer & Solution

2. Current value of portfolio is Rs 550 and to cover an obligation of call option is Rs 200 then value of stock would be

Answer & Solution

3. According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is

Answer & Solution

4. Type of option which cannot be exercised before an expiry date which is classified as

Answer & Solution

5. Input call parity relationship, put option minus call option in addition with stock is equal to

Answer & Solution

Read More Section(Financial Management)

1.
In binomial approach of option pricing model, fourth step is to create

2.
Current value of portfolio is Rs 550 and to cover an obligation of call option is Rs 200 then value of stock would be

3.
According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is

4.
Type of option which cannot be exercised before an expiry date which is classified as

5.
Input call parity relationship, put option minus call option in addition with stock is equal to