How Does the ASX Increase Liquidity in Its Options Market

question 65

Multiple Choice

How does the ASX increase liquidity in its options market?

• A)It concentrates trading in a small number of contracts.
• B)Brokers must charge fixed, low commissions.
• C)It has only four contract dates per year.
• D)It authorises dealers to make the market for specific contracts.
• E)It allows options to be written over any listed share.

---

Definitions:

Market Risk Premium

The extra return investors demand for choosing to invest in the market over a risk-free asset.

Capital Structure Weights

The proportions of a firm's financing that come from different types of capital, such as equity, debt, and preferred stock, used to calculate the weighted average cost of capital (WACC).

Market Value

The now rate for transactions involving the purchase or sale of assets or services.

Debt

Money borrowed by one party from another, under the condition it will be paid back often with interest, used by individuals, businesses, and governments to finance activities.