Exam 20: Futures, swaps, and Risk Management

The following price quotations on IBM were taken from the Wall Street Journal. Stock Price Strike Price February \ 917/8 85 73/8 917/8 90 31/8 917/8 95 5/8 The premium on one IBM February 90 call contract is

Binary Options

The price that the writer of a call option receives for the underlying asset if the buyer executes her option is called the

Asian options differ from American and European options in that

List three types of exotic options and describe their characteristics.

The Option Clearing Corporation is owned by

The lower bound on the market price of a convertible bond is

You purchased a call option for $3.45 seventeen days ago.The call has a strike price of $45 and the stock is now trading for $51.If you exercise the call today,what will be your holding period return? If you do not exercise the call today and it expires,what will be your holding period return?

Top Flight Stock currently sells for $53.A one-year call option with strike price of $58 sells for $10,and the risk free interest rate is 5.5%.What is the price of a one-year put with strike price of $58?

The current market price of a share of AT&T stock is $50.If a put option on this stock has a strike price of $45,the put

Some more "traditional" assets have option-like features; some of these instruments include

Call options on IBM listed stock options are

You purchase one IBM 70 call option for a premium of $6.Ignoring transaction costs,the break-even price of the position is

The price that the writer of a put option receives for the underlying asset if the option is exercised is called the

You purchased one AT&T March 50 put and sold one AT&T April 50 put.Your strategy is known as

You purchase one IBM March 100 put contract for a put premium of $6.What is the maximum profit that you could gain from this strategy?

The price that the writer of a call option receives to sell the option is called the

The maximum loss you could suffer from your strategy is

The current market price of a share of AT&T stock is $50.If a call option on this stock has a strike price of $45,the call

ING Stock currently sells for $38.A one-year call option with strike price of $45 sells for $9,and the risk free interest rate is 4%.What is the price of a one-year put with strike price of $45?