11.A European option can be exercised by:

A)   its owner, anytime during the term of the contract.

B)   either party, at contract expiration.

C)   its owner, only at the expiration of the contract.

D)   either party, anytime during the life of the contract.

12.James Anthony has a short position in a put option with a strike price of $94. If the stock price is below $94 at expiration, what will happen to Anthony’s short position in the option?

A)   He will let the option expire.

B)   He will exercise the option at $94.

C)   He will have the option exercised against him at $94 by the person who is long the put option.

D)   The person who is long the put option will not exercise the put option.

13.Which of the following statements about put and call options at expiration is least accurate?

Put Call

A)                                                                                The maximum gain to the buyer is limited to the stock price less the premium price.                                                              The maximum gain to the buyer is unlimited.

B)                                                            The maximum gain to the buyer is unlimited.     The maximum loss to the writer is the premium.

C)                                                                             The maximum loss to a writer is their cost on the stock less the premium.                                                                                 The maximum gain to the buyer is unlimited.

D)                                                                           The maximum loss to a writer is their cost on the stock less the premium.                                                                              The maximum gain to the writer is the premium.

14.Which of the following statements about options is most accurate?

A)   Most options throughout the world are European options.

B)   For call options, the lower the strike price relative to the stock's underlying price, the more the call option is worth.

C)   A put writer who deposits shares of the underlying stock has written a covered put.

D)   An open call position can be closed before expiration by buying put options on the underlying stocks.

15.Which of the following statements about call options at expiration is most accurate?

A)   All of the answers are correct.

B)   The profit potential to the buyer of the option is unlimited.

C)   The call buyer's maximum loss is the call option's premium.

D)   The potential loss to the writer of the call option is unlimited.

答案和详解如下：

11.A European option can be exercised by:

A)   its owner, anytime during the term of the contract.

B)   either party, at contract expiration.

C)   its owner, only at the expiration of the contract.

D)   either party, anytime during the life of the contract.

The correct answer was C)

A European option can be exercised by its owner only at contract expiration.

12.James Anthony has a short position in a put option with a strike price of $94. If the stock price is below $94 at expiration, what will happen to Anthony’s short position in the option?

A)   He will let the option expire.

B)   He will exercise the option at $94.

C)   He will have the option exercised against him at $94 by the person who is long the put option.

D)   The person who is long the put option will not exercise the put option.

The correct answer was C)

Anthony has sold the right to sell the stock at $94. That is, he received a payment upfront for the payer to have the right but not the obligation to sell the stock at $94. Because the option is in-the-money at expiration, MAX (0, X-S), the holder will exercise his right to sell at $94.

13.Which of the following statements about put and call options at expiration is least accurate?

Put Call

A)                                                                                The maximum gain to the buyer is limited to the stock price less the premium price.                                                              The maximum gain to the buyer is unlimited.

B)                                                            The maximum gain to the buyer is unlimited.     The maximum loss to the writer is the premium.

C)                                                                             The maximum loss to a writer is their cost on the stock less the premium.                                                                                 The maximum gain to the buyer is unlimited.

D)                                                                           The maximum loss to a writer is their cost on the stock less the premium.                                                                              The maximum gain to the writer is the premium.

The correct answer was B)

The maximum gain to the buyer of a put is limited to the value of the stock less the premium.

The maximum loss to the writer of a call is unlimited.

14.Which of the following statements about options is most accurate?

A)   Most options throughout the world are European options.

B)   For call options, the lower the strike price relative to the stock's underlying price, the more the call option is worth.

C)   A put writer who deposits shares of the underlying stock has written a covered put.

D)   An open call position can be closed before expiration by buying put options on the underlying stocks.

The correct answer was B)

The other statements are false. Most options throughout the world are American options. A call writer who deposits shares of the underlying stock has written a covered call. An open call position can be closed before expiration by selling call options on the underlying stocks.

15.Which of the following statements about call options at expiration is most accurate?

A)   All of the answers are correct.

B)   The profit potential to the buyer of the option is unlimited.

C)   The call buyer's maximum loss is the call option's premium.

D)   The potential loss to the writer of the call option is unlimited.

The correct answer was A)

A call option gives its owner the right to purchase an underlying good at a specified price for a specified period of time. When the stock's price (S) is above the strike price (X), a call option has value and is said to be in the money.

The table below summarizes the maximum loss and gain for the call writer/owner:

	Writer	Owner
Maximum Loss	unlimited	premium
Maximum Gain	premium	unlimited

Note: Trading call options is a zero-sum game. The long profits = the short losses.