A increase in which of the following, all else the same, leads to an increase in call option values?

		I. Exercise price
		II. Stock price
		III. Time to expiration
		IV. Volatility
		A. I and III only
		B. II and IV only
		C. I, II, and III only
		D. I, II and IV only
		E. II, III, and IV only

Which of the following is true regarding put options?

		A. European put option values are always less than American put option values.
		B. American put option values are always less than European put option values.
		C. American put option values are always at least as large as European put option values.
		D. European put option values are insensitive to the underlying asset's price.
		E. American put option values are insensitive to the underlying asset's price.

1. The Black-Scholes option pricing formula assumes that stock returns are _______ distributed.

   		A. beta
   		B. gamma
   		C. Normally
   		D. Poisson
   		E. uniformly

Which of the following terms appears in the Black-Scholes call option pricing formula?

		I Stock price volatility
		II Risk-free interest rate
		III Put option value
		IV Market value of debt
		V Exercise price
		A. II only
		B. III and IV only
		C. I and V only
		D. I, II and V only
		E. II, III and IV only

1. Stock ownership can be replicated by:

   		A. Buying call options on a stock and writing put options on a stock.
   		B. Buying call options on a stock and borrowing at the risk-free interest rate.
   		C. Buying put options on a stock and borrowing at the risk-free interest rate.
   		D. Buying put options on a stock, lending funds at the risk-free interest rate, and writing call options.
   		E. Buying call options on a stock, lending funds at the risk-free interest rate, and writing put options.