Which of the Following Is NOT True About Exchange-Trade Equity

question 4

Multiple Choice

Which of the following is NOT true about exchange-trade equity options that mature in different months?

• A) They are certificateless securities trading on the CBOE,NYSE Euronext,Eurex,and other exchanges.
• B) They stop trading on the third Thursday of the expiration month and expire on the following Friday afternoon.
• C) Each option contract usually represents rights to 100 shares.
• D) The option contract is adjusted for cash dividends.
• E) Their value primarily depends on underlying instrument's price and standard deviation,time to maturity,strike price,interest rate.

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Definitions:

Own Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that same good, reflecting consumers' sensitivity to price changes.

First Law of Demand

The principle that there is an inverse relationship between the price of a good and the quantity demanded, all else being equal.

Quantity Demanded

The amount of a product that consumers are willing and able to purchase at a given price.

Price Falls

A decrease in the cost of goods or services in the market.