QUESTION 1 1. An American call option grants the holder the right to: sell the u

Q: QUESTION 1 1. An American call option grants the holder the right to: sell the u

1. buy the underlying security at a stated price on or before the expiration date as American option can be excerised at any till maturity period end whereas European option can be excerised only on maturity i did one question only as per chegg policy of one question per post

ID: 2732245 • Letter: Q

Question

QUESTION 1
1.   An American call option grants the holder the right to:

   sell the underlying security at the strike price on or before the expiration date.

   sell the underlying asset at the strike price only on the expiration date.

   buy the underlying asset at or below the exercise price on or before the expiration date.

   buy the underlying asset at the exercise price only on the expiration date.

   buy the underlying security at a stated price on or before the expiration date.
0.5 points
QUESTION 2
1.   Options expire on the _____ of the expiration month.

   last trading day

   3rd Friday

   last Friday

   Saturday following the 3rd Friday

   Saturday following the last Friday
0.5 points
QUESTION 3
1.   Which one of the following is a derivative asset?

   common stock

   option contract

   government bond

   preferred stock

   corporate bond
0.5 points
QUESTION 4
1.   Use the following bond quotes to answer this question:

What is the current price of a $1,000 face value Alpha Industrial bond?

   $986.67

   $991.04

   $994.02

   $998.23

   $1,000.00
0.5 points
QUESTION 5
1.   You purchased four call option contracts with a strike price of $25.00 and a premium of $1.25. At expiration, the stock was selling for $26.80 a share. What is the total amount it cost you to acquire your shares?

   $8,620

   $9,060

   $10,500

   $11,860

   $12,400
0.5 points
QUESTION 6
1.   Use the following bond quotes to answer this question:

The Talliru Company bond pays interest semi-annually. You own eight of these bonds. What is the amount you will receive as your next interest payment?

   $76.00

   $228.00

   $190.00

   $254.00

   $304.00

Explanation / Answer

buy the underlying security at a stated price on or before the expiration date

as American option can be excerised at any till maturity period end whereas European option can be excerised only on maturity

i did one question only as per chegg policy of one question per post

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QUESTION 1 1. An American call option grants the holder the right to: sell the u

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