ch15(6e) sample
1. If the BlackScholes formula is solved to find the standard deviation consistent with the current market call
premium, that standard deviation would be called the _______.
A. variability
B. volatility
C. implied volatility
D. deviance
2. If putcall parity is violated in the market, this may be _______.
3. The hedge ratio is often called the option's _______.
4. The BlackScholes formula seems to perform worst for stocks with _______ dividends.
5. Before expiration the time value of an outofthe money stock option is __________.
A. equal to the stock price minus the exercise price
B. equal to zero
C. negative
D. positive
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6. The divergence between an option's intrinsic value and its market value is usually greatest when
___________________.
7. The value of a call option increases with all of the following except ___________.
8. A stock option has an intrinsic value of zero if the option is __________.
9. __________ is a true statement.
A. The actual value of a call option is greater than its intrinsic value prior to expiration
B. The intrinsic value of a call option is always greater than its time value prior to expiration
C. The intrinsic value of a call option is always positive prior to expiration
D. The intrinsic value of a call option is greater than its actual value prior to expiration
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 Spring '09
 Dr.Dale
 Business, Options, Volatility, Mathematical finance, Strike price

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