Which of the Following Is Not True Regarding Options

question 65

Multiple Choice

Which of the following is not true regarding options?

• A)Options are traded on exchanges, never over-the-counter.
• B)Similar to futures contracts, margin requirements are normally imposed on option traders.
• C)Although commissions for options are fixed per transaction, multiple contracts may be involved in a transaction, thus lowering the commission per contract.
• D)Currency options can be classified as either put or call options.
• E)All of the above are true.

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Definitions:

Monopoly

A market structure where a single supplier dominates the market, often leading to higher prices and less innovation due to lack of competition.

Profit-Maximizing Monopolist

A single seller in a market that determines the quantity of goods to produce and sell in order to achieve the highest possible profits.

Total Cost Schedules

A tabulation or curve that shows the total cost incurred by a firm at each level of output produced.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.