fficeffice" />
Q6. Bidco Corporation common stock has a market value of $30.00. Which statement about put and call options available on Bidco common is most accurate?
A) A call with a strike price of $25.00 is at-the-money.
B) A put with a strike price of $35.00 is in-the-money.
C) A put with a strike price of $20.00 has intrinsic value.
Q7. James Anthony has a short position in a put option with a strike price of $94. If the stock price is below $94 at expiration, what will happen to Anthony’s short position in the option?
A) The person who is long the put option will not exercise the put option.
B) He will let the option expire.
C) He will have the option exercised against him at $94 by the person who is long the put option.
Q8. A European option can be exercised by:
A) its owner, anytime during the term of the contract.
B) either party, at contract expiration.
C) its owner, only at the expiration of the contract.
Q9. Which of the following statements about puts and calls is most accurate?
A) The most the buyer of a call can lose is the premium.
B) The most the writer of a call can lose is the stock's price less the premium.
C) A put holder will exercise the put if the price of the stock is equal to or less than the strike price.
Q10. A call option that is in the money:
A) has an exercise price less than the market price of the asset.
B) has an exercise price greater than the market price of the asset.
C) has a value greater than its purchase price.
|