You write one JNJ February 70 put for a premium of 5 Ignoring transactions

You write one jnj february 70 put for a premium of 5

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51.You write one JNJ February 70 put for a premium of $5. Ignoring transactions costs, what is the break-even price of this position? A.$65B. $75C. $5D. $70+$70 - $5 = $65.AACSB: AnalyticBlooms: ApplyDifficulty: BasicTopic: Options20-67
52.You purchase one JNJ 75 call option for a premiumof $3. Ignoring transaction costs, the break-even price of the position is A. $75.B. $72.C. $3.D.$78.+75 + $3 = $78.AACSB: AnalyticBlooms: ApplyDifficulty: BasicTopic: Options53.You write one AT&T February 50 put for a premiumof $5. Ignoring transactions costs, what is the break-even price of this position? A. $50B. $55C.$45D. $40+$50 - $5 = $45.AACSB: AnalyticBlooms: ApplyDifficulty: BasicTopic: Options54.You purchase one IBM 200 call option for a premium of $6. Ignoring transaction costs, the break-even price of the position is
A. $194.B. $228.C.$206.D. $211.+200 + $6 = $206.AACSB: AnalyticBlooms: ApplyDifficulty: BasicTopic: Options55.Call options on IBM listed stock options are A. issued by IBM Corporation.B. created by investors.C. traded on various exchanges.D. issued by IBM Corporation and traded on various exchanges.E.created by investors and traded on various exchanges.Options are merely contracts between buyer and seller and sold on various organized exchanges and the OTC market.AACSB: AnalyticBlooms: RememberDifficulty: IntermediateTopic: Options56.Buyers of call options __________ required to postmargin deposits and sellers of put options __________ required to post margin deposits. A. are; are notB. are; are20-69
C.are not; areD. are not; are notE. are always; are sometimesBuyers of call options pose no risk as they have nocommitment. If the option expires worthless, the buyer merely loses the option premium. If the option is in the money at expiration and the buyer lacks funds, there is no requirement to exercise. The seller of a put option is committed to selling the stock at the exercise price. If the seller of the option does not own the underlying stock, the seller must go into the open market and buy the stock in order to be able to sell the stock to the buyer of the contract.AACSB: AnalyticBlooms: RememberDifficulty: IntermediateTopic: Options57.Buyers of put options anticipate the value of the underlying asset will __________ and sellers of call options anticipate the value of the underlying asset will ________. A. increase; increaseB. decrease; increaseC. increase; decreaseD.decrease; decreaseE. Cannot tell without further informationThe buyer of the put option hopes the price will fall in order to exercise the option and sell the stock at a price higher than the market price. Likewise, the seller of the call option hopes the price will decrease so the option will expire worthless.AACSB: AnalyticBlooms: Remember
Difficulty: IntermediateTopic: Options

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