The Margin Requirements for Index Options Are

question 31

Multiple Choice

The margin requirements for index options are

• A) more than for individual stock put options.
• B) not required.
• C) based on Treasury bill rates.
• D) less than for individual stock options.
• DIFFICULT

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Definitions:

Short Run

A period in economics during which the quantity of at least one input (such as plant size) is fixed and cannot be changed.

Long Run

A period in economics sufficient for all markets to adjust to equilibrium, including the adjustment of all production factors and prices of inputs.

Cross-Price Elasticity

A measure of how the demand for one good changes in response to a change in the price of another good.

Substitutes

Products or services that can be used in place of one another; when the price of one increases, the demand for the other may increase as consumers switch to the cheaper option.