i) Which of the following describes a call option? A) The right to buy an asset for a certain price B) The obligation to buy an asset for a certain price C) The right to sell an asset for a certain price D) The obligation to sell an asset for a certain price ii) Which of the following is true? A) A long call is the same as a short put B) A short call is the same as a long put C) A call on a stock plus a stock the same as a put D) None of the above iii) Which of the following describes a short position in an option? A) A position in an option lasting less than one month B) A position in an option lasting less than three months C) A position in an option lasting less than six months D) A position where an option has been sold iv) The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader's net profit or loss? A) Loss of $1,500 B) Loss of $500 C) Gain of $1,500 D) Loss of $1,000 v) A trader buys a call and sells a put with the same strike price and maturity date. What is the position equivalent to? A) A long forward B) Arshort forward C) Buying the asset D) None of the above vi) Which of the following creates a bear spread? A) Buy a low strike price put and sell a high strike price put B) Buy a high strike price put and sell a low strike price put C) Buy a high strike price call and sell a low strike price put D) Buy a high strike price put and sell a low strike price call Derivatives: Isabel Figuerola-Ferretti vii) Which of the following creates a bull spread? A) Buy a low strike price call and sell a high strike price call B) Buy a high strike price call and sell a low strike price call C) Buy a low strike price call and sell a high strike price put D) Buy a low strike price put and sell a high strike price call vii) Which of the following creates a bull spread? A) Buy a low strike price call and sell a high strike price call B) Buy a high strike price call and sell a low strike price call C) Bty a low strike price call and sell a high strike price put D) Buy a low strike price put and sell a high strike price call viii) How can a straddle be created? A) Buy one call and one put with the same strike price and same expiration date B) Buy one call and one put with different strike prices and same expiration date C) Buy one call and two puts with the same strike price and expiration date D) Buy two calls and one put with the same strike price and expiration date ix) Which of the following statements best describes put-call parity? A) The put price always equals the call price. B) The put price equals the call price if the volatility is known. C) The put price plus the underlying price equals the call price plus the present value of the exercise price. D) None of the above x) From put-call parity, which of the following transactions is risk- free? A) A Long asset, long put, short call B) Long call, long put, short asset C) C Long asset. long call, short bond D) None of the above