15

24

28

32

Which one of the following statements is true? Investing has three dimensions: risk, return, and surprise. The primary risk consideration is that of the individual security. How a security affects the risk of a portfolio is more important than the actual risk of the security itself Return is inversely related to risk. Investors are compensated for both systematic and unsystematic risk. You purchased 9 put option contracts on Silver Lakes stock at an option premium of $1.40. The strike price is $30. What is your break-even stock price? $31.40 $27.20 $32.80 $30.00 $28.60 An option which would not yield a profit if exercised now is called a(n) option. cash-settled cash-free in-the-money exercised out-of-the-money You hold an inventory in a commodity and also a short futures position in the same commodity. Currently, your inventory has a market value in excess of its cost. In essence, you have -- by taking the futures position, torfeited any potential future gains from price increases in exchange for eliminating your downside risk increased both your potential gains and your potential losses Increased your potential gains from price increases while limiting your potential losses from price decreases locked in your maximum loss while maintaining your opportunity for additional gains eliminated your current gain on your inventory in exchange for eliminating any potential future loss