Because of the small cash outlay to buy an option, these securities are considered to be conservative investments.

Question 1 options:

a) True

b) False

When a call option is exercised, new stock is issued.

Question 4 options:

a) True

b) False

The most the individual who buys a put option can lose is the cost of the option.

Question 10 options:

	a) True
	b) False

Put-call parity suggests that

Question 11 options:

a)	the sum of the prices of a stock and a call equal zero

b)	the sum of the prices of a put and a call equal zero

c)	the sum of the prices of a stock, a call, a put, and a bond equal zero

d)	sum of the prices of a stock and a put must equal the sum of the prices of a call and a discounted bond with the maturity date as the expiration date of the options