Multiple Choice
In the CURRENCY TRADING section of The Wall Street Journal,the following appeared under the heading OPTIONS:
| Philadelphia Exchange | Puts | ||
| Swiss France | 69.33 | ||
| 62,500 Swiss Francs-cents per unit | Vol. | Last | |
| 68 May | 12 | 0.30 | |
| 69 May | 50 | 0.50 |
(i) The time values of the 68 May and 69 May put options are respectively .30 cents and .50 cents.
(ii) The 68 May put option has a lower time value (price) than the 69 May put option.
(iii) If everything else is kept constant,the spot price and the put premium are inversely related.
(iv) The time values of the 68 May and 69 May put options are,respectively,1.63 cents and 0.83 cents.
(v) If everything else is kept constant,the strike price and the put premium are inversely related.
A) (i) ,(ii) ,and (iii)
B) (ii) ,(iii) ,and (iv)
C) (iii) and (iv)
D) (iv) and (v)
Correct Answer:
Verified
Correct Answer:
Verified
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