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B) A stock option gives the bearer the option to buy or sell a share of shares for a specified price or before a given date. 15) Which of the following statements is false? A) Just as the interest rate sensitivity of a single cash flow increases at maturity, so does the sensitivity of cash flows at maturity. C) A call option gives the owner the right to purchase the asset. D) Since the long page has the opportunity to exercise, the short party is obliged to execute the contract. C) An incumbent would not exercise an option in the money. A) A financial option contract gives the author the right (but not the obligation) to buy or sell an asset at a fixed price at a later date. 4) The use of risk reduction options is called A) speculation. 6) Payment to the owner of a put option is given by: A) Max (S – K, 0) 8) You pay $3.25 for a call option on Luther Industries that expires in three months with a strike 8) price of $40.00. Three months later, at the end of the day, Luther Industries is trading at $41.00 per share. Is your earnings per share in this transaction the closest? B) If the exercise price of an option corresponds to the current share price, it is said that the option is money. Change of portfolio, which changes the weights used to calculate duration as a weighted average maturity.
9) Luther Industries is currently trading at 27 $US per share. The stock does not pay a dividend. A 9) One-year European sale option on Luther with a strike price of $30 is currently being negotiated at $2.60. If the risk-free interest rate is 6% per year, the price of a one-year European call option for Luther with a strike price of 30 dollars is the closest: 5) The market price of an option is called A) European premium. A) The options seller, also known as the options recorder, sells (or writes) the option and has a short position in the contract. 7) An option strategy in which you hold a long position in both a put and call option with strike price 7) is 10) KD Industries Share is currently traded at $32 per share. Consider a put option on the KD 10 stock) with a strike price of $30. The intrinsic value of this put option is: C) the price difference of a U.S. option compared to a European option due to dividend collection. B) When the maturities of an entity`s assets and liabilities are significantly different, the entity has a gap between the life span. D) If interest rates change, securities market securities and cash flows in B are required to sell a security at a specified price.
D) By restructuring the balance sheet to increase its lifespan, we can hedge the company`s interest rate risk. 18) The term of a five-year loan with an annual coupon of 8% traded at face value is as follows: . B) An entity`s market capitalization is determined by the difference in the market value of its assets and liabilities. 17) How long is a zero-to-five-year bond? C) We can measure the sensitivity of a company`s interests by calculating the duration of its balance sheet. . 14) If interest rates are currently 5% but fall to 4%, your estimate of the approximate change in 14) SFTSL capital is as follows: C) The duration of an investment portfolio is the simple average of the durations of each investment in the portfolio. A) Adjusting a portfolio to life is sometimes referred to as portfolio immunization, which indicates that it is protected from changes in interest rates.