# Eartheral Mandental Prolilormial

1474 Words
Sep 4th, 2012
6 Pages

Question 1 Before expiration, the time value of an in the money call option is always

Answer

equal to zero. positive. negative. equal to the stock price minus the exercise price. None of these is correct.

1 points

Question 2 The intrinsic value of an out-of-the-money put option is equal to

Answer

the stock price minus the exercise price. the put premium. zero. the exercise price minus the stock price. None of these is correct.

1 points

Question 3 Use the Black-Scholes Option Pricing Model for the following problem. Given: SO= $70; X = $70; T = 70 days; r = 0.06 annually (0.0001648 daily); σ = 0.020506 (daily). No dividends will be paid before option expires. The value of the call option

Answer

equal to zero. positive. negative. equal to the stock price minus the exercise price. None of these is correct.

1 points

Question 2 The intrinsic value of an out-of-the-money put option is equal to

Answer

the stock price minus the exercise price. the put premium. zero. the exercise price minus the stock price. None of these is correct.

1 points

Question 3 Use the Black-Scholes Option Pricing Model for the following problem. Given: SO= $70; X = $70; T = 70 days; r = 0.06 annually (0.0001648 daily); σ = 0.020506 (daily). No dividends will be paid before option expires. The value of the call option

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The Macaulay duration for the bond is 8.4 years. Given this information, the bond 's modified duration would be

Answer

8.05 9.44 9.27 7.78 None of these is correct.

1 points

Question 13 Holding other factors constant, the interest-rate risk of a coupon bond is higher when the bond 's:

Answer

term-to-maturity is lower. coupon rate is lower. yield to maturity is higher. term-to-maturity is lower and yield to maturity is higher. None of these is correct.

1 points

Question 14 Barber and Odean (2001) report that men __________ than women.

Answer

earn higher returns earn lower returns earn about the same returns generate lower trading costs None of these is correct.

1 points

Question 15 Two popular moving average periods are

Answer

90-day and 52 week 180-day and three year 180-day two year 200-day and 53 week 200-day and two year

1 points

Question 16 The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call

Answer

is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably.

1 points

Question 17 The price that the writer of a call option receives to sell the option is called the

Answer

strike price exercise price execution price

Answer

8.05 9.44 9.27 7.78 None of these is correct.

1 points

Question 13 Holding other factors constant, the interest-rate risk of a coupon bond is higher when the bond 's:

Answer

term-to-maturity is lower. coupon rate is lower. yield to maturity is higher. term-to-maturity is lower and yield to maturity is higher. None of these is correct.

1 points

Question 14 Barber and Odean (2001) report that men __________ than women.

Answer

earn higher returns earn lower returns earn about the same returns generate lower trading costs None of these is correct.

1 points

Question 15 Two popular moving average periods are

Answer

90-day and 52 week 180-day and three year 180-day two year 200-day and 53 week 200-day and two year

1 points

Question 16 The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call

Answer

is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably.

1 points

Question 17 The price that the writer of a call option receives to sell the option is called the

Answer

strike price exercise price execution price

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