Chap021 - Chapter 21 - Option Valuation Chapter 21 Option...

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Chapter 21 - Option Valuation Chapter 21 Option Valuation Multiple Choice Questions 1. Before expiration, the time value of an in the money call option is always A. equal to zero. B. positive. C. negative. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 2. Before expiration, the time value of an in the money put option is always A. equal to zero. B. negative. C. positive. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 21-1
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Chapter 21 - Option Valuation 3. Before expiration, the time value of an at the money call option is always A. positive. B. equal to zero. C. negative. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 4. Before expiration, the time value of an at the money put option is always A. equal to zero. B. equal to the stock price minus the exercise price. C. negative. D. positive. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 5. At expiration, the time value of an in the money call option is always A. equal to zero. B. positive. C. negative. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 21-2
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6. At expiration, the time value of an in the money put option is always A. equal to zero. B. negative. C. positive. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 7. At expiration, the time value of an at the money call option is always A. positive. B. equal to zero. C. negative. D. equal to the stock price minus the exercise price. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option. Difficulty: Easy 8. At expiration, the time value of an at the money put option is always A. equal to zero. B. equal to the stock price minus the exercise price. C. negative. D. positive. E. none of the above. The difference between the actual option price and the intrinsic value is called the time value of the option.
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This note was uploaded on 01/08/2011 for the course MBA ECON taught by Professor Hamza during the Spring '10 term at Prince Sultan University.

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Chap021 - Chapter 21 - Option Valuation Chapter 21 Option...

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