Chapter 5, Problem 2MC

1.

Summary Introduction

Case summary:

Person X was hired by Company T as a financial analyst and he was asked to prepare a brief report which can be used by the executives to attain a cursory understanding on the topic. He used question and answer format to prepare the report. After the questions being drafted person X needs to answer to the questions.

To discuss: The term call option

2.

Summary Introduction

To discuss: The term put option

3.

Summary Introduction

To discuss: The term strike price

4.

Summary Introduction

To discuss: The term expiration date.

5.

Summary Introduction

To discuss: The term exercise value.

6.

Summary Introduction

To discuss: The term option price

7.

Summary Introduction

To discuss: The term time value.

8.

Summary Introduction

To discuss: The term writing an option.

9.

Summary Introduction

To discuss: The term covered option.

10.

Summary Introduction

To discuss: The term naked option.

11.

Summary Introduction

To discuss: The term in the money call

12.

Summary Introduction

To discuss: The term on the money call

13.

Summary Introduction

To discuss: The term LEAPS