QUESTION $2$

Which of the following statements is true?

a$.$ For both calls and puts an increase in the exercise price will cause an increase in the option price

b$.$ For both calls and puts an increase in the time to maturity will cause an increase in the option price

c$.$ For calls, but not for puts, an increase in the time to maturity will cause an increase in the option price

d$.$ For puts, but not for calls, an increase in the time to maturity will cause an increase in the option price

QUESTION $5$

The price of an option increases with an increase in all of the following except:

a$.$ Stock price

b$.$ Interest rate

c$.$ Time to expiration

d$.$ Exercise price

QUESTION $7$

Which of the following investors would be happy to see the stock price rise sharply?

a$.$ An investor who owns a call option

b$.$ An investor who owns a put option

c$.$ An investor who owns the stock and has sold a call option

d$.$ An investor who has sold a call option

QUESTION $8$

Suppose an investor buys a call option with an exercise price of $$25.$ If the stock is trading at $$30,$ the option is:

a$.$ At$-$the$-$money

b$.$ In$-$the$-$money

c$.$ Out$-$of$-$the$-$money

d$.$ Near$-$the$-$money

QUESTION $10$

Which of the following are call options?

a$.$ The abandonment option on an investment project

b$.$ Stand$-$by underwriting

c$.$ Both $($a$)$ and $($b$)$

d$.$ The company's option to redeem its bonds at a premium before maturity