The CBOE Brought Numerous Innovations to the Option Market

question 45

Multiple Choice

The CBOE brought numerous innovations to the option market. Which of the following is NOT such an innovation?

• A) creation of a central marketplace
• B) creation of a non-liquid secondary option market
• C) introduction of a Clearing Corporation
• D) standardization of all expiration dates
• E) standardization of all exercise prices

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Definitions:

IRC

The Internal Revenue Code, which is the comprehensive set of tax laws in the United States governing federal tax obligations.

Active Income/Loss

Income or losses generated from direct business activities or employment, as opposed to passive income from investments.

Passive Income/Loss

Earnings from rental property, limited partnerships, or other enterprises in which the individual is not actively involved.

Passive Activity Loss Rules

Regulations that limit the amount of losses taxpayers can deduct from passive activities, such as rental properties, against other income.