The course: Risk Management & Insurance

1. When there's an increase in a put option price, the

A. volatility in return of the underlying asset increases. B. interest rates decrease. C. Price of the underlying asset increases. D. time to maturity decreases.

2. The cost of carry relationship is illustrated by which of the following equations?

A. Forward price = Spot price at time t + Cost of carry B. Forward price + Spot price at time t = Cost of carry C. Forward price = Spot price at time t 5 Cost of carry D. Forward price 5 Spot price at time t = Cost of carry