1.If Wal-Mart stock is selling at $58 and 50 October calls are selling for $7 then

a. the call is undervalued

b. the call is overvalued

c. the call is valued at its intrinsic value

d. none of the above

3.A call option is said to be 'in the money' ,when the strike price is

a. equal to the market price

b. greater than the market price

c. less than the market price

d. none of the above

4.The speculative premium on an option is higher. all other things equal

a. when an option is in-the-money

b. when an option is at-the-money

c. when an option is out-of-the-money

d. none of the above

5.The maximum gain on a long put occurs when the stock price at expiration is

a. infinite

b. equal to the exercise price

c. zero

d. none of the above