Strayer University - FIN 534 Week 6 Complete Quiz. A+ Graded. Latest 2021.Question 1
4 out of 4 points
An investor who
writes standard call
options
... [Show More] against
stock held in his or
her portfolio is said
to be selling what
type of options?
Answer
Selected Answer:
Covered
Correct Answer:
Covered
• Question 2
4 out of 4 points
Which of the
following
statements is most
correct, holding
other things
constant, for XYZ
Corporation's traded
call options?
Answer
Selected Answer:
The price of these call options is likely to rise if XYZ's stock price rises.
Correct Answer:
The price of these call options is likely to rise if XYZ's stock price rises.
• Question 3
4 out of 4 points
An option that gives
the holder the right
to sell a stock at a
specified price at
some future time is
Answer
Selected Answer:
a put option.
Correct Answer:
a put option.
• Question 4
4 out of 4 points
Cazden Motors'
stock is trading at
$30 a share. Call
options on the
company's stock are
also available, some
with a strike price of
$25 and some with a
strike price of $35.
Both options expire
in three months.
Which of the
following best
describes the value
of these options?
Answer
Selected
Answer: If Cazden's stock price rose by $5, the exercise value of the options with the
$25 strike price would also increase by $5.
Correct
Answer: If Cazden's stock price rose by $5, the exercise value of the options with the
$25 strike price would also increase by $5.
• Question 5
4 out of 4 points
The current price of
a stock is $50, the
annual risk-free rate
is 6%, and a 1-year
call option with a
strike price of $55
sells for $7.20.
What is the value of
a put option,
assuming the same
strike price and
expiration date as
for the call option?
Answer
Selected Answer:
$9.00
Correct Answer:
$9.00
• Question 6
4 out of 4 points
Braddock
Construction Co.'s
stock is trading at
$20 a share. Call
options that expire
in three months with
a strike price of $20
sell for $1.50.
Which of the
following will occur
if the stock price
increases 10%, to
$22 a share?
Answer
Selected
Answer: The price of the call option will increase by less than $2, but the percentage
increase in price will be more than 10%.
Correct
Answer: The price of the call option will increase by less than $2, but the percentage
increase in price will be more than 10%.
• Question 7
4 out of 4 points
Other things held
constant, the value
of an option
depends on the
stock's price, the
risk-free rate, and
the
Answer
Selected Answer:
All of the above.
Correct Answer:
All of the above. [Show Less]