1) The value of an option depends on the stock's price, the risk-free rate, and the
|
a. |
Exercise price. |
|
b. |
Variability of the stock price. |
|
c. |
Option's time to maturity. |
|
d. |
All of the above. |
|
e. |
None of the above. |
2. An option which gives the holder the right to buy a stock at a specified price at some time in the future is called a(n)
|
a. |
naked option. |
|
b. |
put option. |
|
c. |
call option. |
|
d. |
in-the-money option. |
|
e. |
out-of the money option. |
3. A long-term option issued by a corporation to buy a stated number of shares of common stock at a specified price is a(n)
|
a. |
preferred stock. |
|
b. |
convertible bond. |
|
c. |
warrant. |
|
d. |
put option. |
|
e. |
retained earnings option. |
