Given that the delivery price is $100 for a forward contract on
an asset worth $110 on the maturity date of the forward
contract, then which of the following is closest to the payoff to
the long position in the forward contract?
If you enter into a long call with a stock as the underlying and the
options strike price is $100 with a premium of $6, then which of the
following is the most likely ending stock price that causes the net
payoffs to equal zero (also called the break-even
If you hold shares of a stock that you want to keep for the long term
but feel it will not increase or decrease in value in the short term,
then which strategy is most consistent with your view of the
A naked call
Which of the following positions with an option contract is most
likely to have a right to buy the underlying at the strike price?
A long position in a call
A short position in a put
A short position in a call
Which of the followin
If firm A can issue fixed rate bonds at 9% or a floating rate note at
LIBOR plus 1.5%,
+ 1.5, and firm B can issue fixed rate
bonds at 5% or a floating rate note at LIBOR flat,
, then, with
the use of a fixed-for-floating swap, what would be the best poss
The duration of option-free bonds may be appropriately interpreted
as which of the following?
The relative advantage of an interest-rate investment over
an equity investment.
The time-weighted or effective maturity of a portfolio of
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If an expiring call option has a strike price of $1500/oz. for
gold and the spot price for gold at expiration is $1530, what
will the holder of the option most likely do?
Exercise the option and buy gold at $1500/oz.
Exercise the opti
The price of an option contract is most likely called which of
The specified price for a transaction in the underlying of an
option is most likely which of th
According to the Black-Scholes option pricing model, which of the following
statements is the most appropriate description of the shape of a graph of the
price of a European call option with six months to maturity and 20% volatility