1. an orange farmer expects to harvests 90,000 oranges by December 31^st 2017. A futures contact on oranges maturing on December 21^st is available today with the following specs:

i. 1 future contact= 15,000 oranges

ii. price per orange= US$0.50

He has decided to hedge with a short, what is the total selling price of the oranges?

1. Us$7500
2. US$45000
3. US$17,500
4. US$6000

2. The black-scholes OPM is dependent on which five parameters?

a. stock price, exercise price, risk free rate, beta, and time to maturity

b. stock price, risk free rate, beta, time to maturity, and variance

c. stock price, risk free rate, probability, variance and exervise price

d. stock price, exercise price, risk free rate, variance and time to maturity

3. a six-month call option has an exercise price of US$45 while the underlying stock currently sells for US$50. The call option is selling for US$9.75 and the risk-free rate of return is 7% per annum. What is the value of the put option?

a. 3.20

b. 4.20

c. 6.20

d.cannot be determined

4. in a _______, the managers of the firm purchase the outstanding shares and take the firm private.

a. proxy contest

b. tender offer

c. vertical acquisition

d. management buyout

5. Firm A has total value of US$8 million and Firm B has a total value of US$6 million. If the two firms merge, there will be a cost of saving of US$1.5 million . what is the incremental gain from the merger?

a. US$1.5 million

b. US$2.0 million

c. US$0.5 million

d. US$3.0 million

6. best buy currently has 1000000 shares outstanding. The current market price of shares is US$100.00 per share. Assuming a perfect world, what will be the effect on the number of outstanding shares and price of a 3 for 2 stock split:

a. outstanding shares= 1500000 shares; shareprice US66.67

b. outstanding shares= 1250000 shares; share price US80.00

c. outstanding shares= 1250000 shares; shareprice us95.00

d. outstanding shares= 1250000 shares; shareprice us66.67

7. futures contracts contrast with forward contacts by:

a. trading on an organized exchanged

b. marking to the market on a daily basis

c. allowing the seller to deliver any day over the delivery month

d. all of the above

Please select all the correct answers for a thumbs up, thank you:)