4. The price of a call option is ___ correlated with the dividend amount and __ correlated with the risk-free interest rate.

a) negatively, postively

b) positively, negatively

c) positively, positively

d) negatively negatively

5. The price of a call option and put option are respectively __ correlated and __ correlated with the underlying volatility.

a) positively, negatively

b) negatively, postively

c) negatively, negatively

d) positively, positively

6. How would you hedge your portfolio of airline stock if you expect prices to fall?

a) sell a put option

b) buy a put option

c) sell a call option

d) buy a call option

Answer all questions correctly for good review