Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need to know if the answers are right? A contract that gives the holder the right to buy a security at a present price
i need to know if the answers are right?
A contract that gives the holder the right to buy a security at a present price only on contract expiration is a(n). A) European call option B) American call option C) American put option D) European put option You have taken an option position and if prices drop you could lose a fixed small amount of money, but if prices rise your gain rises with it, you have A) Bought a call option B) Bought a put option C) Written a call option D) Written a put option What measures do exchanges use to minimize the default risk of futures contracts? A) Daily marked to market B) Margin requirements C) Price movement limits D) All of the above Row Bank has assets of $150 million, liabilities of $135 million, and equity of $15 million. The asset duration is six years and the duration of the liabilities is four years. Row Banks has a _____ adjusted duration gap. A _____ position is T-bond futures should be used to hedge the interest rate risk. A) positive; short B) positive; long C) negative; short D) negative; long A stock has a spot price of $27. Its May options are about to expire. One of its calls is worth $2 and one of its puts is worth $3. The exercise price of the call must be _____ and the exercise price of the put must be A) 24, 29 B) 25, 30 C) 29, 24 D) 30, 25 E) 29, 30 For a bend put option, the _____ the exercise price the greater the intrinsic value of the put option. For a bond call option, the _____ the exercise price the greater the intrinsic value of the call options. A) Higher; higher B) Lower; lower C) Higher; lower D) Lower; higherStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started