1. A mature companys stock is trading at $107.85 and it will pay a dividend next year of $3.22 per share. Analysts believe that the stock will grow at 3.5% annually forever. If the market risk premium is calculated at 7.27% and the risk-free rate is at 3.45%, what is the stocks beta?

2. Which of the following statements are false?

a. All else being equal, options of the same strike will increase in price depending on the volatility of the underlying.

b. A short put option is functionally the same as a long call option.

c. According to put-call parity, if a stock is trading for a price that is at-the-money, the put and the call should be trading at the same, or very close to, the same price.

d. All of the above are false.

e. All of the above are true.

3. Which Greek Statistic describes the rate of option premium decay:

a. Rho b. Delta c. Vega d. Theta e. Lambda

4. Which of the following statements is false?

a. Risk neutrality means that an investor are not looking at risk in an investment, just returns.

b. Risk aversion means that an investor prefer a fixed amount with certainty over a larger amount with risk.

c. Risk seeking means that an investor is willing to accept the higher risk that goes with higher payoff.

d. All of the above are false.

e. None of the above are false.