Hull: Fundamentals of Futures and Options Markets, Ninth Edition
Chapter 22: Exotic Options and Other Nonstandard Products
Multiple Choice Test Bank
1. An Asian option is a term used to describe which of the following
A. An option where the payoff depends on whether a barrier is hit
B. An option where the payoff depends on the average value of a variable over a period of
time
C. An option that trades on an exchange in the Far East
D. Any option with a nonstandard payoff
2. As the barrier is observed more frequently, a knock out option becomes which of the following
A. More valuable
B. Less valuable
C. There is no effect on value
D. May become more valuable or less valuable
3. There are two types of regular options (calls and puts). How many types of compound options
are there?
A. Two
B. Four
C. Six
D. Eight
4. There are two types of regular options (calls and puts). How many types of barrier options are
there?
A. Two
B. Four
C. Six
D. Eight
