Stock Market Future And Options Quiz Mock Test: Paper 2

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Future and Options Quiz Mock Test (paper 2)

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Total number of questions: 40
Time allotted: 30 minutes
Pass Score: 45%
Certificate: Yes
Random questions: Yes
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1 / 40

1. How does Theta change for at-the-money options as they approach expiration?

A) It increases.

B) It becomes negative.

C) It remains constant.

D) It decreases.

2 / 40

2. What is the primary purpose of options contracts in F&O trading?

A) To offer fixed interest rates.

B) To speculate on future price movements.

C) To eliminate market risk.

D) To provide guaranteed returns.

3 / 40

3. What does the Greek "Vega" measure in options trading?

A) The sensitivity of an option's price to changes in implied volatility.

B) The rate of time decay.

C) The sensitivity of an option's delta to changes in the underlying asset's price.

D) The sensitivity of an option's price to changes in interest rates.

4 / 40

4. What is the Greek "Delta" for a call option?

A) Zero.

B) Positive.

C) Negative.

D) It depends on the strike price.

5 / 40

5. What are the underlying assets for options on foreign exchange (forex) currency pairs?

A) Physical currencies.

B) Single-stock futures.

C) Precious metals.

D) Agricultural products.

6 / 40

6. What is the underlying asset for futures and options contracts based on volatility?

A) Agricultural products.

B) Cryptocurrencies.

C) Precious metals.

D) The implied or realized volatility of other assets.

7 / 40

7. Which Greek represents the time value of an option?

A) Delta.

B) Theta.

C) Gamma.

D) Vega.

8 / 40

8. What are the primary underlying assets for futures and options contracts in the energy sector?

A) Precious metals.

B) Agricultural commodities.

C) Energy resources such as crude oil and natural gas.

D) Individual stocks.

9 / 40

9. In F&O trading, what does the term "underlying asset" refer to?

A) The asset used as collateral for trading.

B) The asset that is currently traded in the market.

C) The asset that will be delivered in the future.

D) The asset's intrinsic value.

10 / 40

10. What Greek indicates the rate of time decay for an option?

A) Gamma.

B) Theta.

C) Rho.

D) Delta.

11 / 40

11. What is the range of values for Delta?

A) #NAME?

B) 0 to 1.

C) 0 to ?ê?.

D) -1 to 1.

12 / 40

12. What does the abbreviation "F&O" stand for in the context of the stock market?

A) Futures and Options

B) Fixed and Open

C) Forward and Overdraft

D) Free and Online

13 / 40

13. What is the primary use of "Delta" in options trading?

A) Estimating interest rate sensitivity.

B) Calculating the sensitivity to changes in the underlying asset's price.

C) Assessing the impact of implied volatility.

D) Measuring time decay.

14 / 40

14. In the context of options, what are "single-stock futures" based on?

A) Individual stocks.

B) Precious metals.

C) Government bonds.

D) Agricultural commodities.

15 / 40

15. Which Greek measures the sensitivity of an option's price to changes in implied volatility?

A) Theta.

B) Rho.

C) Gamma.

D) Vega.

16 / 40

16. Which Options Greek measures the rate at which the option's price changes in response to changes in the underlying asset's price?

A) Gamma

B) Theta

C) Delta

D) Vega

17 / 40

17. What Greek measures the sensitivity of an option's price to changes in interest rates?

A) Theta.

B) Rho.

C) Delta.

D) Gamma.

18 / 40

18. What does the term "Rho" represent in options Greeks?

A) The sensitivity of an option's price to changes in implied volatility.

B) The sensitivity of an option's price to changes in the underlying asset's price.

C) The rate of time decay.

D) The sensitivity of an option's price to changes in interest rates.

19 / 40

19. What type of assets serve as underlying assets for environmental futures and options, such as carbon allowances?

A) Environmental commodities like carbon allowances.

B) Cryptocurrencies.

C) Precious metals.

D) Agricultural products.

20 / 40

20. What are the underlying assets for options on cryptocurrencies?

A) Precious metals.

B) Cryptocurrencies like Bitcoin or Ethereum.

C) Only traditional currencies.

D) Agricultural products.

21 / 40

21. What is the Greek "Delta" for a put option?

A) Zero.

B) Negative.

C) Positive.

D) It depends on the strike price.

22 / 40

22. In options trading, what are "ETF options" typically based on?

A) Precious metals.

B) Only individual stocks.

C) Cryptocurrencies.

D) Exchange-traded funds (ETFs) that track various assets, including stocks, bonds, or commodities.

23 / 40

23. What are the underlying assets for interest rate options?

A) Agricultural products.

B) Cryptocurrencies.

C) Precious metals.

D) Interest rate futures contracts or government bonds.

24 / 40

24. Which Greek represents the exposure of an options portfolio to the overall market direction?

A) Gamma.

B) Theta.

C) Vega.

D) Delta.

25 / 40

25. What does the term "Gamma" represent in options trading?

A) The sensitivity of an option's delta to changes in the underlying asset's price.

B) The rate of time decay.

C) The sensitivity of an option's price to changes in interest rates.

D) The sensitivity of an option's price to changes in implied volatility.

26 / 40

26. Which Greek measures the sensitivity of an option's price to changes in the underlying asset's price?

A) Gamma.

B) Theta.

C) Vega.

D) Delta.

27 / 40

27. Which Greek measures the rate at which an option's delta changes with changes in the underlying asset's price?

A) Theta.

B) Gamma.

C) Delta

D) Vega.

28 / 40

28. If an option has a high Vega, what does this imply about its sensitivity to changes in implied volatility?

A) It has a low rate of time decay.

B) It is highly sensitive to changes in the underlying asset's price.

C) It is not affected by changes in implied volatility.

D) It is highly sensitive to changes in implied volatility.

29 / 40

29. What serves as the underlying asset for index options?

A) Individual stocks.

B) Precious metals.

C) Agricultural products.

D) A basket of stocks representing an index, like the S&P 500.

30 / 40

30. What serves as the underlying asset for options on real estate investment trusts (REITs)?

A) Precious metals.

B) Real estate indices or REITs.

C) Physical currencies.

D) Individual homes.

31 / 40

31. What is the key difference between a futures contract and an options contract in F&O trading?

A) Futures contracts involve no risk, while options contracts carry risk.

B) Futures contracts give the holder the obligation to buy or sell the underlying asset, while options contracts give the holder the right but not the obligation.

C) Futures contracts have no expiration date, while options contracts do.

D) Futures contracts provide the holder with the right to buy or sell the underlying asset, while options contracts provide the holder with the obligation to do so.

32 / 40

32. What does the Greek "Theta" indicate for an options contract?

A) The sensitivity of an option's price to changes in interest rates.

B) The rate of time decay of an option's value.

C) The sensitivity of an option's price to changes in implied volatility.

D) The sensitivity of an option's price to changes in the underlying asset's price.

33 / 40

33. Which of the following statements is true about futures contracts in F&O trading?

A) They give the holder the right but not the obligation to buy or sell an asset.

B) They are not subject to market fluctuations.

C) They have no expiration date.

D) They are standardized and traded on an exchange.

34 / 40

34. In options trading, what does the term "implied volatility" refer to?

A) The volatility of the underlying asset.

B) The volatility of the options market itself.

C) Market participants' expectations of future price volatility.

D) The volatility experienced in the past.

35 / 40

35. What type of assets serve as underlying assets for options on weather and temperature-related futures and options?

A) Weather and temperature data.

B) Precious metals.

C) Cryptocurrencies.

D) Agricultural products.

36 / 40

36. What serves as the underlying asset for options on precious metals like gold and silver?

A) Cryptocurrencies.

B) Precious metals indices.

C) Physical delivery of the metals.

D) Agricultural products.

37 / 40

37. How does Gamma change as an option moves closer to expiration?

A) It remains constant.

B) It decreases.

C) It increases.

D) It becomes negative.

38 / 40

38. What does a high positive Vega value imply for an options position?

A) It has a low sensitivity to changes in the underlying asset's price.

B) It gains value when implied volatility decreases.

C) It gains value when implied volatility increases.

D) It is insensitive to changes in implied volatility.

39 / 40

39. What serves as the underlying asset for bond options?

A) Energy resources.

B) Agricultural products.

C) Government securities.

D) Corporate bonds.

40 / 40

40. What type of assets serve as underlying assets for interest rate futures and options?

A) Precious metals.

B) Government bonds or other interest rate securities.

C) Agricultural products.

D) Cryptocurrencies.

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