Management and Organizational Studies 3370A/B Study Guide - Quiz Guide: Futures Exchange, Call Option, Futures Contract

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Maria Ferraro

Document Summary

There is direct relationship between the price of a call option and the volatility of the underlying common stock. Investors purchase call options when they expect the price of the underlying stock to: In the futures market, the initial margin is: A. a down payment where money is borrowed from the broker to finance the total cost. B. is subject to weekly resettlement based on marked to market. C. is a good faith deposit made by both long and short positions to ensure the completion of the contract. D. is currently set at 100% of market value. The small deposit made with the clearing house is called the: A. is only put up by the buyer. B. can be put up by either party, whoever initiates the transaction. C. is only put up by the seller. D. must be put up by both the buyer and the seller.