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1. You write a put option on a stock for a premium of $1. The exercise price is $6.50. What is the options profit or
1. You write a put option on a stock for a premium of $1. The exercise price is $6.50. What is the options profit or loss if just prior to expiration the stock price is $6.00? a. $0.50 b. $1.00 c. ($1.00) d. ($0.50) e. $0 2. Which of the following values comes closest to the net present value of a project that requires an initial investment of $250 and produces cash flows of $60 per year for 10 consecutive years beginning at the end of year 5 (the cash flows go from the end of year 5 through the end of year 14)? The required rate of return is 10%? a. ($34.55) b. $1.81 c. ($17.23) d. ($64.70) e. ($50.32)
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