$1)$ As a put option moves deep out of the money, its delta approaches zero.

True

False

$2)$ An investor has a portfolio consisting of Microsoft Corp $($MSFT$)$ options: $1,500$ long call options with a delta $\mathrm{.}47,1,200$ long put options with a delta of $-\mathrm{.}53,$ and $1,000$ short call options with a delta of $\mathrm{.}57.$ How many shares of Microsoft should be purchased$/$sold in order to delta hedge the portfolio?

a$.$ Buy $406$ MSFT

b$.$ Sell $423$ MSFT

c$.$ Buy $501$ MSFT

d$.$ Sell $576$ MSFT

$3)$ Use the following information for problems $14$ thru $16.$ The following facts are available about a convertible bond: Face Value $=$ $$1,000$; Issue Price $=$ $$975$; Conversion Ratio $=50$; Current Market Share Price $=$ $$17\mathrm{.}50.$

What is the conversion price of this bond?

a$.$ $$10$

b$.$ $$20$

c$.$ $$40$

d$.$ $$50$