4) Assume the strike price is equal to the current stock price. If you think the stock price will remain the same months from now, which option(s) do you take to generate a gain?

I. Short a call option

II. Short a put option

III. Long a call option

IV. Long a put option

a) I & II

b) I & IV

c) II & III

d) III & IV

e) None of the above choices

5) Investors will generally accept a lower yield on ________ than on __________ of comparable terms, making them a less costly source of funds for the issuer to service.

a) Illiquid bonds ; liquid bonds

b) Regular bonds ; warrant-linked bonds

c) Registered bonds ; bearer bonds

d) Domestic bonds ; Eurobonds

e) None of the above choices