Answers15 - c 1. a. b. c. d. e. a 2. a. b. c. d. e. b 3. a....

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c 1. The fixed price in an option contract at which the owner can buy or sell the underlying asset is called the option’s: a. opening price. b. intrinsic value. c. strike price. d. market price. e. time value. a 2. An option that may be exercised only on the expiration date is called a(n) _____ option. a. European b. American c. Bermudan d. futures e. Asian b 3. A _____ is a derivative security that gives the owner the right, but not the obligation, to buy an asset at a fixed price for a specified period of time. a. futures contract b. call option c. put option d. swap e. forward contract d 4. An option based on an underlying asset such as a building or land is called a _____ option. a. financial b. liquid c. fixed d. real e. tangible c 5. Jeff opted to exercise his August option on August 10 and received $2,500 in exchange for his shares. Jeff must have owned a (an): a. warrant. b. American call. c. American put. d. European call. e. European put. a 6. Jillian owns an option which gives her the right to purchase shares of WAN stock at a price of $20 a share. Currently, WAN stock is selling for $24.50. Jillian would like to
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Answers15 - c 1. a. b. c. d. e. a 2. a. b. c. d. e. b 3. a....

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