Financial Options and Applications in Corporate Finance
According to the Black Scholes model, the short term seller receives today’s price which
short term cash proceeds
proceeds in cheques
full cash proceeds
zero proceeds
full cash proceeds
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According to the Black Scholes model, the selling and buying of the stock haveA. discount rate
B. transaction costs
C. no transaction costs
D. no discounts
In an option pricing, a rises in risk free rate results in option’s value
A. slight time decreases
B. slight increases
C. slight decreases
D. slight time increases
The current value of portfolio is $550 and to cover an obligation of call option is $200 then the value of stock would be
A. 350
B. 0.0275
C. 750
D. 2.75 times
An option that gives investors the right to sell a stock at predefined price is classified as
A. put option
B. call option
C. money back options
D. out of money options
The present value of portfolio is $900 and the current value of stock in portfolio is $1500 then the current option price would be
A. 2400
B. โ$600
C. โ$2400
D. 600
According to the Black Scholes model, the stocks with the call option pays the
A. dividends
B. no dividends
C. current price
D. past price
The yield on Treasury bill with a maturity is classified as a risk free rate but must be equal to an
A. option closing price
B. option beginning price
C. option expiration
D. option model
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