Which One of the Following Statements Is Correct

question 64

Multiple Choice

Which one of the following statements is correct?

• A)Reduced Value index options are equal in size to one percent of the standard index option.
• B)The holder of a stock index put option is betting that the underlying index will increase in value.
• C)Most index options are traded on the New York Options Exchange.
• D)The contract size for a call option on the S&P 500 is 10 times the index.
• E)Some stock index options close in the morning while others close at the end of the trading day.

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Definitions:

Direct-Financing Leases

Direct-Financing Leases are lease agreements where the lessor essentially acts as a financier, purchasing an asset and leasing it to the lessee, without assuming risk of ownership.

Capital Lease

A lease classified as a financial transaction where the lessee effectively buys an asset and finances it over the lease term.

Operating Lease

An agreement that permits the utilization of an asset without owning it, usually with a shorter duration than a finance lease.

Fair Value

What one would earn from selling an asset or what it would cost to shift a liability in a systematic operation with market actors on the appraisal date.