As described in the videos, to simplify things in class, we think of option premium as consisting of

Group of answer choices

four part

one part

two part

three part

Question 14

A speculator is looking at a July 420 corn put that has a premium of 19 cents; futures are currently at 415. If the speculator buys this option for 19 cents, what will have to happen for it to be worth that amount at expiration?

Group of answer choices

the futures price will have to rise by 5 cents

the futures price will have to rise by 14 cents

the futures price will have to fall by 5 cents

the futures price will have to fall by 14 cents

Question 15

Calls that have strike prices below the future price are

Group of answer choices

at the money

in the money

out of the money

beside the money

Question 16

A former student buys at 900 call at Time 1 when the futures price is 820. At Time 2, the futures price has risen to 985. Which is true?

Group of answer choices

The premium at Time 2 is entirely time value

There was more intrinsic value at Time 1 than there is at Time 2

The call was worth more at Time 1 than it is at Time 2

The call is worth more at Time 2 than it was at Time 1