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LOS g: Determine the minimum and maximum values of European options and American options.
Q1. Which of the following statements regarding an option prior to expiration is TRUE? The maximum value of:
A) a European put is equal to the maximum value of an American put.
B) an American call is less than the maximum value of a European call.
C) a European put is less than the maximum value of an American put.
Q2. The following value diagram illustrates a:
A) long put option.
B) long call option.
C) short put option.
The maximum that the call buyer can lose is the amount of the premium, while the profit potential for the call buyer is unlimited.
Q3. The following value diagram illustrates a:
A) short put option.
B) long put option.
C) short call option.
Q4. Which of the following statements about puts is FALSE? The most the:
A) writer can gain is the put premium.
B) writer can lose is the strike price less the premium.
C) buyer can gain is unlimited.
Q5. The minimum value for a European call option is:
A) max [0, (S – X) / (1 + R)T].
B) min [0, S ? X / (1 + R)T].
C) max [0, S ? X / (1 + R)T].
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发表于 2009-3-2 10:46
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