1. Go to the options screen for Netflix. Select one call option that doesn’t expire for 3 months.
 a. What is NFLX’s current stock price?
 b. What is the strike price of this call option?
 c. Is this call option “in-the-money” or “out-of-the money”?
 d. How much will you have to pay to purchase this call option? (Assume that you will purchase only one call option contract.)
 e. If the stock price were to increase by $20 from its current price just prior to this call option’s expiration, what would be your profit, excluding commissions?
 2. You believe that NFLX’s stock price is too high and that it will decline in the next 6 months. Select one put option that you might use.
 a. What is the strike price of this put option?
 b. How much will you have to pay to purchase this put option? (Assume that you will purchase only one put option contract.)
 c. If the stock price were to decline by $20 below the put option’s strike price just prior to this put option’s
 expiration, what would be your profit, excluding commissions?
 3. Select a 10-year U.S. Treasury Note futures contract that won’t be delivered for 3 months. (On the CME Group  website, select the Data tab, Delayed Quotes, and click on the Interest Rates tab. Then click on 10-year U.S. Treasury Note from Globex.)
 a. What is the contract’s delivery month?
 b. What is the price (in dollars) of one $100,000 contract?
 c. How much has the contract’s price changed (in dollars) from its previous quote?
 d. What is the implied interest rate on this contract?
 e. Does the market expect interest rates to increase or decrease from the current level?
 f. If interest rates decrease 1% from the implied interest rate you previously calculated on this contract, how  much would the contract be worth now?
 g. What is your profit/loss on the contract?This chapter discussed the use of derivatives in risk management. A derivative is a security whose value is determined by the market price of some other asset. Among the different types of derivatives discussed were options and interest rate futures. To answer these questions about Netflix’s options and U.S. Treasury Notes futures contracts, you will find the following websites helpful: Bloomberg, Yahoo! Finance, Google Finance, MSN Money (www.msn.com/en-us/money/markets), and the Chicago Mercantile Exchange’s website (cmegroup.com).