Which of the Following Is True About a Futures Option

question 19

Multiple Choice

Which of the following is true about a futures option and a spot option on the same underlying asset with an identical strike price and expiration date?

• A) A European call spot option and an American call futures option are equivalent
• B) An American call spot option and a European call futures option are equivalent
• C) A European put spot option and European put futures option are equivalent
• D) An American put spot option and American put futures option are equivalent

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Definitions:

Scientific Investigation

A systematic procedure that involves the collection and analysis of data to create new knowledge or validate existing knowledge.

Data Collection

The process of gathering and measuring information on variables of interest in an established systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation, which can be tested through research and experimentation.

Causal Factors

Elements or variables that directly influence the outcome or cause an event to occur.