FIN401 Managerial Finance II final
practice exam walk through tips fall
2024Toronto Metropolitan
University
, lOMoARcPSD|6353920
Final Exam – - SOLUTION
Name:
Student #:
Professor: _
- Time allowed: 3 hours
- Aids allowed: None except for an 8’1/2” by 11’ double sided cheat sheet
and a calculator
- The exam is out of 60 marks.
- There are 40 multiple choice questions. Each multiple choice question is
worth 1 mark.
- The remaining non-multiple choice questions are worth 20 marks.
- Answer all multiple choice questions on the marksense sheet.
- Answer all non-multiple choice questions in the space provided.
- Please put your name, student number, and professor’s name on the front
of this exam questionnaire AND at the top of the non-
multiple choice section.
- Print or write VERY NEATLY. If I can’t read your writing, your answers
won’t get marked.
1. You buy 15 wheat futures contracts when the price is $2.61 per bushel (each
contract is for 5,000 bushels). The price on the maturity date is $2.21. What is your
payoff?
a) -$30,000
b) -$2,000
c) $0
d) $2,000
e) $30,000
2. You sell 10 gold futures contracts when the futures price is $342.70 per ounce (each
contract is for 100 ounces). The price on the maturity date is $302.30. What is your
payoff?
a) -$40,400
b) -$4,040
c) $404
d) $4,040
e)
$40,400
3. You buy one futures contract for 5,000 bushels of soybeans with a settlement price
of $6.92 per bushel. If the price is $7.58 per bushel at the contract expiration, what is
your payoff?
a) -$37,900
b) -$3,300
1
, lOMoARcPSD|6353920
c) $2,130
d) $3,300
e)
$37,900
4. You purchased a May American call option on Netscape stock with an exercise
price of $165. Which of the following statements is true?
a) You have the right to buy Netscape shares for $165 at any time prior to
the option expiration, regardless of the stock’s market price.
b) You are obligated to buy Netscape shares for $165 when the option expires
in May, regardless of the stock’s market price.
c) You have the right to sell Netscape shares for $165 at any time prior to the option
expiration in May, regardless of the stock’s market price.
d) You are obligated to sell Netscape shares for $165 when the option expires
in May, regardless of the stock’s market price.
e) You have the right to buy Netscape shares for $165 at any time prior to the option
expiration in May, but only if the stock’s market price is less than $165.
Use the following information to answer the next SIX questions.
Option
OutTel Call Put
Share Strik Exp. Vol. Las Vol. Las
Price e t t
25 20.0 Jan. 101 6 69 1
25 20.0 Feb. 79 7 54 2
25 22.5 Mar. 65 5 40 4
5. You want to purchase one February call contract option on the stock. The $2
contract with a exercise price will cost you . (Ignore transactions costs.) 0
a) $100
b) $200
c) $500
d) $600
e) $700
6. What is the market value per share of the March call?
a)
$4
b)
$5
c) $6
d) $7
e) $12
7. What is the intrinsic value per share of the
January call? a) $0.00
b) $1.00
c) $5.00
d)
$6.00
e) $7.00
2
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