Exam (elaborations)
Fina 310 Test Questions And Answers Latest Update
- Course
- Institution
Fina 310 Test Questions And Answers Latest Update
[Show more]
Seller
Follow
Schoolflix
Reviews received
Content preview
Solution 2024/2025Pepper
Fina 310 Test Questions And Answers Latest
Update
An order placed by an investor for the broker to buy an option at the best
available price is called a market order.
a. True
b. False ANS✔✔ t
The time value of a call is greatest when the stock price is very high.
a. True
b. False ANS✔✔ f
If a call is overpriced and you buy the call and sell short the stock, it is
equivalent to investing money at less than the risk-free rate.
a. True
b. False ANS✔✔ t
Most investors close their positions by exercising their options.
a. True
b. False ANS✔✔ f
The binomial probabilities are probabilities if investors were risk neutral.
a. True
b. False ANS✔✔ t
, Solution 2024/2025
Pepper
A put option increases in value when the stock price decreases.
a. True
b. False ANS✔✔ t
If there is one period remaining and no possibility of the option expiring in-
the-money, the hedge ratio will be zero.
a. True
b. False ANS✔✔ t
The law of one price states that the price of an asset cannot change.
a. True
b. False ANS✔✔ f
The absence of a daily settlement is one of the factors distinguishing a
forward contract from a futures contract.
a. True
b. False ANS✔✔ t
If a call is underpriced and you buy the call and sell short the stock, it is
equivalent to investing money at more than the risk-free rate.
a. True
b. False ANS✔✔ t
The lower the exercise price, the more valuable the call option.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Schoolflix. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
72042 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now