1.Victor Niederhoffer blew up his hedge fund because he was: (Choose all correct answers. Incorrect answers will count against you.)

short too many calls.

long too many puts

None of the choices given is correct.

long too many calls.

short too many puts.

2 If your portfolio is short stock, which of the following synthetic positions do you have? (Choose all correct answers. Incorrect answers will count against you.)

Long synthetic put.

Short synthetic stock.

Short synthetic call.

Long synthetic stock.

3.If an at-the-money European call on non-dividend paying stock with 5 months to expiration is trading for USD 3.24 and an otherwise identical put is trading for USD 3.14 when the stock is trading at USD 42.1 in an economy with a continuously-compounded interest rate of 6.3%/year, what is the profit in USD on an arbitrage trade if the profit is taken at expiration?

4.The Black-Scholes option pricing equation assumes which of the following? (Choose all correct answers. Incorrect answers will count against you.)

Normality of underlying returns.

None of the choices given is correct.

Lognormality of underlying returns.

Normality of underlying prices.

Lognormality of underlying prices.

5.In Victor Niederhoffer had been able to make his margin call in 1997, how many years would it have taken him to make back his 34.2% loss if his strategy made 14.4% per year in every year after 1997? (Enter your time to 2 decimal places; e.g., 5.37)