14. A a. b. c. d. engages in transactions that are designed to offset some existing or anticipated risk. hedger slacker speculator rocker 15. According to the CAPM (i.e. the Security Market Line, SML) points on the SML indicate equilibrium where expected and required rates of return are equal. True b. False a. 20. A stock currently sells for $150 per share. A call option on the stock has an exercise price of $160. The call option is a. At-the-money. b. In-the-money c. Out-of-the-money. d. a new Verizon product. 21. A stock currently sells for $65 per share. A put option on the stock has an exercise price of $70 currently. The put option is a. At-the-money b. In-the-money c. Out-of-the-money. d. a new golf rule. 22. What strategy could be considered insurance for an investment in a portfolio of stocks? a. An insured call b. A protective put c. A shot put d. A European call