8) An investor believes that the price of a stock, say IBM's shares, will increase after 60 days. If the investor is correct, which combination of the following investment strategies will show a profit in all the choices?

I. buy the stock and hold it for 60 days

II. buy a put option

III. sell (write) a call option

IV. buy a call option

V. sell (write) a put option

a) II, III

b) III, V

c) I, II & III

d) I, IV, & V

e) III, IV, & V

9) Which of the following statements are false regarding future and forward contracts?

I. As a seller of the future contract, you gain if the next-day (later) price decreases from the future agreed price.

II. For forward contracts, there are daily settlements which reduce/eliminate counter party risks.

III. Unlike options, parties in future and forward contracts are legally bounded to settle their positions, even if the positions are unprofitable.

a) I only

b) II only

c) III only

d) I and II only

e) None of the above choices