Which Two of the Following Are Key to Making SPX

question 22

Multiple Choice

Which two of the following are key to making SPX options an easy choice as a hedge against an equity portfolio?
I.European style
II.American style
III.trade in whole or partial contracts
IV.cash settlement

• A) III only
• B) I and III only
• C) I and IV only
• D) II and III only
• E) II and IV only

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Definitions:

Gross Method

An accounting approach to recording purchases at their full invoice amount without deducting any cash discounts offered.

Merchandise Return

The process of a customer returning previously purchased goods to the seller, often due to defects or unsatisfaction, which may result in a refund or replacement.

Gross Method

An accounting method for recording purchases at the total invoice cost without deducting any cash discounts at the time of purchase.

Perpetual Inventory System

An accounting method that continuously updates the quantity and cost of inventory as purchases and sales are made.