ions: Attempt all 33 4 tted. Good luck the short answer questions in Sestion A,

Question

ions: Attempt all 33 4 tted. Good luck the short answer questions in Sestion A, simply mark the correct choice inwoursan ection B you are to answer more detailed questions wihere all relewant angmens and culations must be shown in your blue book Section The fixed price in an option contract at which the holder can buy or sell the underlying isset is called the option's: a opening pice. b. intrinsic value. c strike price. d. market price. e. time value. 2. A put option is theanasset at a fixed price during a stated period of time. a. right to sell b. right to buy c. obligation to sell d. obligation to buy e. obligation to trade at the end of October and paid $2,600 at that time to acquire 100 shares of stock. Maria probably owned an: a. American call. b. American put. c. European call. d. European put. e. European convertible bond. option on West Ridge stock expires today. The current price of West Ridge stock is 4. A 25 put S27. The put is: a. funded. c. at the money. d. in the money. e out of the money

Explanation / Answer

Question Answer Explantion 1 c price at which option can be exercised is called strike price 2 a a put option gives the option holder right to sell 3 a Maria bought shares hence it is call option, option is exercised before expirty date hence it is american option 4 e a put option is out of money when strike price(25) is less than stock price(27)

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