MGT3084test2 old word

MGT3084test2 old word - MGT 3084 Midterm 2 Name: _ Make...

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MGT 3084 Midterm 2 Name: _______________________ Make sure you read the questions carefully. c + Ke -rT = p + S 0 Sd Su f f d u - - = ƒ = [ p ƒ u + (1 – p d ] e rT Please return the exam to me . d u d e p rT - - =
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1. A security giving you the right to buy IBM stock in the future but not the obligation is A) a put option. B) a call option. C) a long position in the futures contract. D) a short position in the futures contract. 2. A person who buys an option from the exchange may do the following except A) allow it to expire. B) extend it. C) exercise it. D) sell it. 3. A call option whose strike price is above the current stock price is A) out-of-the-money B) in-the-money. C) at-the-money. D) can not be determined. 4. All of the following are true except A) an in-the-money American option has positive intrinsic value. B) an out-of-the-money American option expiring one year later is worthless. C) an at-the-money American option has zero intrinsic value. D) an out-of-the-money option has zero intrinsic value. 5. All of the following are true except : A) the higher the strike price, the greater the value of a put option. B) the higher the strike price, the greater the value of a call option. C) the higher the current stock price, the greater the value of a call option. D) the lower the stock price, the greater the value of a put option. 6. If you think that stock price is going to decrease significantly from its current level, you should A) buy a call option B) sell a call option C) buy a put option D) sell a put option
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7. Suppose the current stock price is $100. A call option on that stock with a strike price of $91 is selling at $11. The time value of this option is A) 2.50 B) 2.00 C) 21.50 D) 1.50 8. Which of the following is an option series? A) IBM call options. B) IBM put options maturing in October 2009. C) Microsoft call options and put options. D) Microsoft call options maturing in October 2009 with a strike price of $100. 9. Which of the following is not a feature of employee stock options? A) They can be converted to bonds if the owner wants to. B) They normally can not be traded. C) They often last much longer than exchange-traded options.
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MGT3084test2 old word - MGT 3084 Midterm 2 Name: _ Make...

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