Question 1. � Question : � (TCO A) An order that closes an existing position is called a(n) ______. Question 2. � Question : � (TCO A) Which of the following is not a characteristic of a short call position? Question 3. � Question : � (TCO E) The owner of a call that expires in the money (ignore cash settlement options) ________. Question 4. � Question : � (TCO C) For tax purposes, futures contracts are assumed to be ______. Question 5. � Question : � (TCO C) The agency that administers the Commodity Exchange Act is ____. Question 6. � Question : � (TCO D) A Jan 50 call option is deep in the money when the ______. Question 7. � Question : � (TCO A) How many equity option exchanges exist in the United States? Question 8. � Question : � (TCO C) What is the tax consequence when a short call that was written more than a year ago on stock expires worthless? Question 9. � Question : � (TCO D) Assume that put and call options with a $50 strike price expire with the stock at $70. Which of the following statements is correct? Question 10. Question : � (TCO E) Assume the following: Option � � Strike price Call price � Put price A � 90 � 18 � 1 B � 100 � 9 � 3 C � 110 � 3 � 8 D � 120 � 1 � 17 What would a short put condor include? Question 11. Question : � (TCO F) What happens to gamma as expiration is approached for options that are near the money? Question 12. Question : � (TCO G) The first rule of the cash-and-carry relationship for futures contracts is that the futures price must be _______. Question 13. Question : � (TCO G) The Dow Jones Industrial Average is ______. Question 14. Question : � (TCO G) A fund manager who wants to buy Japanese equities now, but won’t have the cash for three months can buy a stock index futures contract as a ______. Question 15. Question : � (TCO F) Strangle writers prefer ______. Question 16. Question : � (TCO F) What is the approximate value of delta for a deep-in-the-money call? Question 17. Question : � (TCO F) Vega is least for options that are ______. Question 18. Question : � (TCO A) On which exchanges do options on futures trade? Question 19. Question : � (TCO D) A trader sold a Sep 50 call for $5. At expiration, the stock closed at $53. What was the net result after the trader delivered the stock? Question 20. Question : � (TCO B) In 1979″�1980, the Hunt brothers manipulated which market? Question 21. Question : � (TCO B) Which of the following is the most actively traded futures contract? Question 22. Question : � (TCO E) The maximum profit in a bull put spread at expiration occurs when the stock price is _______. Question 23. Question : � (TCO C) What is the limitation on the tax deductibility of net capital losses in one tax year? Question 24. Question : � (TCO D) The maximum profit in a bull call spread at expiration occurs when the stock price is _______. Question 1. � Question : � (TCO C) An investor bought 100 shares of stock at $40. The stock now sells for $60 and the investor writes a 65 call for $2. What is the maximum possible gain and loss in this covered call position? Question 2. � Question : � (TCO D) An investor bought stock at $50 and sold a covered call with a 55 strike price for $2. The stock now sells for $60. Part 1: What is the intrinsic value in the option? Assume the call is priced at $7. Part 2: What is the time value in the option? Part 3: What would you expect to happen to the value of the call and the 55 put if a shock to the market causes volatility to increase dramatically? Question 3. � Question : � (TCO E) Part 1: If you hold two XYZ Dec 60 calls and the stock splits 2 for 1, what will be your resulting position? Part 2: What is the gain or loss for the following long butterfly spread if the stock is at $302 at expiration? Buy 1 Jun 300 call at 9 Sell 2 Jun 305 calls at 5 Buy 1 Jun 310 call at 2 Part 3: Construct a bull put spread with the following options: Apr 40 put at 3 Apr 45 put at 6 Show the P/L result over a range of 38″�47. Question 4. � Question : � (TCO G) What are the independent variables in the equity options pricing model? What would you expect deltas to be for an at-the-money call and an at-the-money put? Why do some portfolio managers attempt to remain delta neutral? What kind of position do straddle writers plan to maintain?
Previous answers to this question
This is a preview of an assignment submitted on our website by a student. If you need help with this question or any assignment help, click on the order button below and get started. We guarantee authentic, quality, 100% plagiarism free work or your money back.
Get The Answer