Question 116 Given the following data regarding Printer, Inc.’s call options, which of the following statements is least accurate? Stock Price | Expiration | Strike | Option Prem. (Last) | 50 | June | 45 | 6 | 50 | June | 50 | 2 | 50 | June | 55 | 0.50 |
A) The June $45.00 call is an in-the-money option. B) The June $50.00 call is an at-the-money option. C) The intrinsic value of the June $45.00 call is $5.00. D) The June $55.00 call is an in-the-money option.
Question 117 Jill Booton is evaluating an apartment building as a possible investment to add to her portfolio. She has been told that real estate is a good addition to a portfolio for diversification purposes. Jill will not be able to handle the maintenance issues at the complex and thus must hire a full-time maintenance employee at $35,000 per year. She will also hire a full-time manager at $40,000 per year. Property taxes are expected to be $75,000 per year and insurance will be another $25,000. If fully occupied, the gross rental income from the property will be $850,000. Due to the location of the building, Jill estimates a very low vacancy rate of 3.5 percent annually. The net operating income of the property is closest to: A) $4,963,462. B) $825,250. C) $6,348,077. D) $645,250.
Question 118 Harold Moore, CFA, wants to establish a collateralized futures position in an investable commodity index. Which of the following actions would correctly implement such a position? A) Sell index futures contracts with an expected future value of $30 million and buy Treasury securities with an expected future value of $30 million. B) Buy index futures contracts with an expected future value of $30 million and buy Treasury securities with a market value of $30 million. C) Sell index futures contracts with $30 million in underlying value and buy Treasury securities with an expected future value of $30 million. D) Buy index futures contracts with $30 million in underlying value and buy Treasury securities with a market value of $30 million.
Question 119 Compared to traditional equity investments, hedge funds face unique risks, including: A) higher standard deviation of returns, counterparty risk, and illiquidity. B) potential mispricing, higher standard deviation of returns, and illiquidity. C) counterparty credit risk, liquidity risk, and potential for mispricing. D) potential mispricing, counterparty risk, and higher volatility of returns.
Question 120 A fund manager predicts that a recession is imminent. He believes this will cause automobile sales and the stock prices of auto manufacturers to decline. Since his fund is required to maintain a large stock position in auto manufacturers, he is looking for a way to offset some of the fund’s exposure to the risk facing the auto industry. Which of the following strategies would least effectively accomplish this goal? A) Sell steel futures. B) Buy steel futures. C) Buy utility stocks. D) Buy put options on an auto industry ETF. | 
发表于 2008-11-6 18:19
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