C) A call option gives the owner the right to purchase the asset. D) Since the long side has the possibility to exercise, the short side is obliged to perform the contract. 6) The payment to the holder of a put option is made by: A) P = max(S – K, 0) C) the difference in price of a US option compared to a European option due to the conquest of the dividend. A) A financial option agreement gives the author the right (but not the obligation) to buy or sell an asset at a fixed price at a later date. 7) An option strategy where you hold a long position in both a put option and a call option with the 7) same exercise price is called 4) the use of risk mitigation options is called A) speculation. C) A holder would not exercise an option in the currency. 9) Luther Industries is currently trading at $27 per share. The stock does not pay dividends. A one-year European call option 9) on Luther with an exercise price of $30 is currently trading at $2.60. If the risk-free interest rate is 6% per annum, then the price of a one-year European call option on Luther with an exercise price of $30 will also be the closest: portfolio change, which in turn changes the weights used in calculating duration as a value-weighted average term. A) The option seller, also known as an options writer, sells (or writes) the option and has a short position in the contract. 10) KD Industries shares are currently trading at $32 per share.
Consider a call option on KD(10) stock with an exercise price of $30. The intrinsic value of this call option is: 8) You pay $3.25 for a call option on Luther Industries that expires in three months with a Strike 8) price of $40.00. Three months later, upon expiration, Luther Industries traded at $41.00 per share. Is your earnings per share on this transaction the closest? B) If the exercise price of an option is equal to the current share price, according to the current share price, the option will be to money. B) A stock option gives the holder the opportunity to buy or sell a share as close as possible to the date of a certain price. 5) The market price of an option is called A) European premium. 15) Which of the following statements is false? A) Just as the interest rate sensitivity of a single cash flow increases with its maturity, the interest rate sensitivity of a cash flow increases with its duration. C) The duration of an investment portfolio is the simple average of the duration of each investment in the portfolio. . the portfolio, a term that indicates that it is protected against changes in interest rates.
14) If interest rates are currently 5% but fall to 4%, your estimate of the approximate change of 14) SFTSL equity is closest to:. . . .
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