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Purchased an american style call option

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Reference no: EM133111218

1. You recently purchased an American style call option, paying significantly more for this option than would have been the case had you purchased an analogous European style call option with the same maturity on the same asset at the same strike price. The underlying asset of this option is most probably:

A. A bar of gold

B. The Nasdaq 100 Index

C. 100 million Malaysian ringgit (MYR)

D. The shares of an electric utility

2. Assume the S&P 500 Index currently stands at 4605 and the dividend yield of the Index is less than the one year risk free rate. If you sell a one year call struck at 3605, the delta of your position will be between:

A. +0.5 and +1.0

B. zero and +0.5

C. -0.5 and zero

D. -1.0 and -0.5

Reference no: EM133111218

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