1. Buying one option and writing another with a higher exercise price, all on the same underlying, is called a

Select one:

a. Straddle

b. Bear Spread

c. Calendar Spread

d. Strangle

e. Bull Spread

2. An option combination in which someone buys both puts and calls, with the same exercise price, on the same underlying asset is called a

Select one:

a. A calendar spread

b. A bear spread

c. A bull spread

d. A long straddle

e. A short straddle

3.The Binomial Option Pricing model simulates future possible paths for the option, and brings those paths back to today in order to figure out a "fair" price for the option.

Select one:

True

False

4.

What is one unique thing that occurs in options but is not there in futures, forwards, or swaps?

Select one:

a. obligation to accept losses as well as gains

b. arbitrage

c. the premium

d. discount rates