9. Reinsurance is offered in the form of a lump sum if a certain loss level is reached. This reinsurer is then writing ____ on the losses.

_____

1. A binary call option
2. A lookback option
3. A forward-start option
4. A barrier option

9. You are offered the following call option on a zero-coupon bond with a maturity value of 100, two years to expiration and a strike price of 100.25. What is the value of this option?

______

1. $100
2. $100.25
3. $0
4. Undetermined

9. An investor buys a call option on some futures contract with an exercise price of $90. Further assume that the current futures price is $95 and that the buyer exercises the option. What is the resulting futures position for the option buyer and option writer, respectively?

______

1. $90; $95
2. $90; $90
3. $95; $90
4. $5; -$5