12. On June 30,2017 the October ABC 40 call option sold for 2 and 1/2 while the underlying stock sold for 38 and 3/4. Which of the following statements about the above ABC call option is false? a option premium was 2 and 1/2 b. striking price is 40 c. the option expires on Saturday following the third Friday in October 2017 d. the speculative premium was 2 and 1/2 e. none of the above 13. Which of the following positions would create the most risk for an investor? a. owning 100 shares of ABC and buying one ABC put b. owning 100 shares of ABC and selling one ABC put c. selling short 100 shares of ABC and selling one ABC put d. selling short 100 shares of ABC and buying one ABC call 14. Mr. Smith has sold short 100 shares of BOB at 70. The account is properly margined. After BOB falls to 66, the investor sells one BOB 70 put for 6. What is the net cash deposit required from the investor for the sale of the put? a. $990 b. $590 e. $400 d. S0 15. Which of the following strategies has essentially the same profit diagram as a covered call? b. a short put c. a long call d. a short stock e. none of the above 16. The owner of a share of stock can hedge the long position by: a. buying a call option b. writing a put option c. writing a call option d. none of the above 17. Which of the following statements is true about the purchase of a long put at a higher exercise price relative to a lower exercise price? a. the breakeven price is lower b. the maximum loss is greater c. the value of the put insurance is less costly d. the value of the put insurance is more costly e. none of the above