10) KD Industries shares are currently trading at $32 per share. Consider a put option on the KD 10 stock) with a strike price of $30. The intrinsic value of this put option is: C) A licensee would not exercise an in-the-money option. 15) Which of the following statements is false? A) Just as the interest rate sensitivity of a single cash flow increases at maturity, so does the sensitivity of cash flows at maturity. A) The options seller, also known as the options recorder, sells (or writes) the option and has a short position in the contract. 6) Payment to the holder of a put option is made by: A) P max (S – K, 0) 4) The use of risk reduction options is called speculation A. Portfolio change, which changes the weightings used to calculate duration as a weighted average maturity. B) A stock option gives the bearer the option to buy or sell a share of shares for a specified price or before a given date. 5) The market price of an option is referred to as A) European Premium. C) A call option gives the owner the right to purchase the asset. 8) You pay $3.25 for a call option for Luther Industries that expires in three months with a strike 8) price of $40.00. Three months later, at the end of the day, Luther Industries is trading at $41.00 per share. Is your earnings per share in this transaction the closest? 9) Luther Industries is currently trading at 27 $US per share.
The stock does not pay a dividend. A 9) One-year European sale option on Luther with a strike price of $30 is currently being negotiated at $2.60. If the risk-free interest rate is 6% per year, then the price of a one-year European call option for Luther with a strike price of $30 will be the closest: 7) An option strategy in which you have a long position in both a sale and call option with price 7 at a later date. C) the price difference of a U.S. option compared to a European option due to the acquisition of dividends. D) Since the long page has the opportunity to exercise, the short party is obliged to execute the contract. B) If the exercise price of an option corresponds to the current share price, it is said that the option is money. A) Adjusting a portfolio to neutral duration is sometimes referred to as immunizing C) We can measure the sensitivity of a company`s interests by calculating the duration of its balance sheet. 17) How long is a zero-to-five-year coupon loan? . . B) An entity`s market capitalization is determined by the difference in the market value of its assets and liabilities.
C) The duration of an asset portfolio is the simple average of the duration of each investment in the portfolio. 18) The duration of a five-year loan at 8% annual coupon traded at face value is the closest: 14) If interest rates are currently 5% but fall to 4%, your estimate of the approximate change of 14) SFTSL equity is the closest: the portfolio, a term that indicates that it is protected from changes in interest rates. D) If interest rates change, securities market securities and cash flows in B are required to sell a security at a specified price. D) By restructuring the balance sheet to increase its lifespan, we can hedge the company`s interest rate risk. B) If the maturities of an entity`s assets and liabilities are significantly different, the entity is in compliance with the lifespan.