disiz64

1. B
2. C
3. C
4. D
5. A
6. E
7. E
8. E
9. E
10. D
11. B
12. B
13. C
14. A
15. D
16. E
17. A
18. A
19. D

smartpants

And 11 is not a good question for the reasons I described in my first post.

I'm not nitpicking OP; just trying to learn from some discussion here! Thanks again for the questions, where did you get them? Or did you just make them up yourself?

amqata

b
c
c
d
a
e
e
a
c
d
b
d
c
b
c
e
a
a
d

draz

I don't understand 8, 9, and 15.

8) Shouldn't this be the CML and not the SML? When all of the answers dealt with portfolios, I just assumed they were all wrong because the CML refers to efficient portfolios and the SML refers to the pricing of securities.

9) The duration of a bond is really a combination of a, b, and c. I don't think there is one that is better than the others. A bond that pays a coupon of 50% is not going to have a significantly higher duration if it matures in 50 years; a bond like this will NOT be very sensitive at all to changes in the YTM because the coupon is so high, even though the TTM is very long. My point is that there isn't one of these options that is more important than the others. Can someone explain why I am wrong?

15) C can't possibly be right. C says it is always optimal to exercise an American call option at the expiration date. If I'm out of the money, there's no way I'm exercising my option at the expiration date!

evolsteevol

1)b
2)c
3)b
4)d
5)a
6)e
7)e
8)e
9)d
10)d
11)b
12)b
13)c
14)b
15)e
16)c
17)a
18)a
19)d

rgonzalez

1) b
2) c
3) c
4) d
5) a
6) e
7) e
8) b
9) e
10) d
11) b
12) b
13) c
14) b
15) c
16) e
17) a
18) a
19) d

kamara5

1)b
2)c
3)c
4)d
5)a
6)e
7)e
8)e
9)e
10)d
11)b
12)b
13)c
14)b
15)e
16)d
17)a
18)a
19)d

The options available look awfully disgusting!