Question 1

The relationship between the call option price, the put option price, and the price of the underlying asset is knows as:

Accepted Answer

A)  Risk/return relationship. 
B)  Put-call parity relationship. 
C)  Binomial relationship. 
D)  Arbitrage relationship. 
E)  None of the above. 
A)  Risk/return relationship. 
B)  Put-call parity relationship. 
C)  Binomial relationship. 
D)  Arbitrage relationship. 
E)  None of the above.

Question 2

A put option can be used to hedge against:

Accepted Answer

A)  An increase in the price of the underlying instrument. 
B)  A decrease in the price of the underlying instrument. 
C)  A decrease in interest rates. 
D)  All of the above. 
E)  None of the above. 
A)  An increase in the price of the underlying instrument. 
B)  A decrease in the price of the underlying instrument. 
C)  A decrease in interest rates. 
D)  All of the above. 
E)  None of the above.

Question 3

What are the basic components of the option price?

Accepted Answer

a. Intrinsic value.
b. Time va

Question 4

The option premium is the:

Accepted Answer

A)  Price of the option. 
B)  Cost of the option. 
C)  Value of the option. 
D)  All of the above. 
E)  None of the above. 
A)  Price of the option. 
B)  Cost of the option. 
C)  Value of the option. 
D)  All of the above. 
E)  None of the above.

Question 5

Discuss the factors that influence the option price.

Accepted Answer

a. Current price of the underl

The relationship between the call option price, the put option price, and the price of the underlying asset is knows as:

A put option can be used to hedge against:

What are the basic components of the option price?

The option premium is the:

Discuss the factors that influence the option price.

Introduction

Overview of Market Participants and Financial Innovation

Depository Institutions

Insurance Companies

Asset Management Firms

Investment Banking Firms

Primary and Secondary Markets

Risk and Return Theories: I

Risk and Return Theories: II

Introduction to Financial Futures Markets

Introduction to the Swaps, Caps, and Floors Markets

Common Stock Market: I

Common Stock Market: II

Stock Options Market

The Market for Stock Index Products and Other Equity Derivatives

The Theory and Structure of Interest Rates

Valuation of Debt Contracts and Their Price Volatility Characteristics

The Term Structure of Interest Rates

Money Markets

Treasury and Agency Securities Markets

Corporate Senior Instruments Markets: I

Corporate Senior Instruments Markets: II

Municipal Securities Markets

The Residential Mortgage Market

The Market for Residential Mortgage-Backed Securities

Market for Asset-Backed Securities

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

International Bond Markets

International Bond Markets

Market for Interest Rate Risk Transfer Vehicles: OTC Instruments

The Market for Foreign Exchange and Risk Control Instruments

Filters

Exam 11: Introduction to Options Markets

The relationship between the call option price, the put option price, and the price of the underlying asset is knows as:

A put option can be used to hedge against:

What are the basic components of the option price?

The option premium is the:

Discuss the factors that influence the option price.

Introduction

Overview of Market Participants and Financial Innovation

Depository Institutions

Insurance Companies

Asset Management Firms

Investment Banking Firms

Primary and Secondary Markets

Risk and Return Theories: I

Risk and Return Theories: II

Introduction to Financial Futures Markets

Introduction to the Swaps, Caps, and Floors Markets

Common Stock Market: I

Common Stock Market: II

Stock Options Market

The Market for Stock Index Products and Other Equity Derivatives

The Theory and Structure of Interest Rates

Valuation of Debt Contracts and Their Price Volatility Characteristics

The Term Structure of Interest Rates

Money Markets

Treasury and Agency Securities Markets

Corporate Senior Instruments Markets: I

Corporate Senior Instruments Markets: II

Municipal Securities Markets

The Residential Mortgage Market

The Market for Residential Mortgage-Backed Securities

Market for Asset-Backed Securities

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

International Bond Markets

International Bond Markets

Market for Interest Rate Risk Transfer Vehicles: OTC Instruments

The Market for Foreign Exchange and Risk Control Instruments

Filters