Question

Q1. The minimum equity that must be maintained at all times in a margin account is called the:

A. initial margin

B. initial equity position

C. maintenance margin

D. call requirement

E. margin call

Q2. Wythe is trying to decide whether he wants to purchase shares in General Motors, Ford, Honda, all of which are auto manufacturers. Wythe is making a(n) _______ decision.

A. security selection

B. tax-advantaged

C. risk aversion

D. active strategy

E. asset allocation

Q3. A contract that grants its buyer the right, but not the obligation, to sell an asset at a .... price is called a:

A. futures contract

B. call option

C. preset contract

D. put option

E. primary contact

Q4. If you are willing to sell a stock and wish to receive the option premium you ....

A. buy a call

B. sell a call

C. buy a put

D. sell a put

E. either sell a call or buy a put

Answer 1

1. The minimum equity that must be maintained at all times in a margin account is called the maintenance margin.
Option c. maintenance margin.

2. Wythe is making a(n) security selection decision.
Option a. security selection.

3. A contract that grants its buyer the right, but not the obligation, to sell an asset at a .... price is called a put option.

Option d. Put option.

4. . If you are willing to sell a stock and wish to receive the option premium you sell a call.

Option b. Sell a call.