A) $0.55
B) $0.69
C) $1.37
D) $2.43
E) $2.75
G) A) and E)
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A) $21.40
B) $22.00
C) $23.00
D) $23.42
E) $25.70
G) A) and B)
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A) -$0.98
B) $0
C) $0.15
D) $6.12
E) $7.10
G) A) and B)
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A) -$360
B) -$120
C) $0
D) $120
E) $360
G) All of the above
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A) -$250
B) -$80
C) $0
D) $50
E) $80
G) D) and E)
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E
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A) usually have a positive intrinsic value when issued.
B) must be backdated at least six months to comply with Sarbanes-Oxley.
C) are generally "underwater" when issued.
D) are frequently repriced if the options are in-the-money.
E) are generally issued with a zero intrinsic value.
G) C) and D)
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A) call options.
B) put options.
C) straddles.
D) managerial options.
E) executive options.
G) C) and D)
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A) suspension
B) expansion
C) abandonment
D) contraction
E) re-introduction
G) D) and E)
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A) conversion premium
B) straight bond value
C) conversion value
D) conversion price
E) conversion ratio
G) B) and C)
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E
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A) $7.00
B) $13.58
C) $14.00
D) $16.67
E) $19.48
G) B) and D)
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A) $1.20
B) $2.59
C) $4.79
D) $5.13
E) $7.27
G) B) and E)
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A) European
B) American
C) inflexible
D) dated
E) pointed
G) B) and D)
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A) A price decrease in Alpha stock will increase the value of Mark's call option.
B) A March $30 call is worth more than Mark's $20 call.
C) The time premium on an April $20 put is less than the time premium on Mark's put. (Assume both puts expire in the same calendar year.)
D) A price increase in Alpha stock from $26 to $28 will increase the value of Mark's put.
E) If the intrinsic value of Mark's put increases by $1 then the intrinsic value of his call must either decrease by $1 or equal zero.
G) C) and D)
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A) strike price minus the initial cost of the option
B) exercise price plus the price of the underlying stock
C) strike price
D) market price of the underlying stock
E) purchase price
G) None of the above
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A) provide employees with put options on their shares of company stock
B) provide an immediately vested benefit to key employees
C) influence the actions and priorities of employees
D) distribute excess cash to key employees to avoid corporate taxation
E) provide an immediate capital gain to certain employees
G) C) and E)
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A) also finish in-the-money.
B) finish at-the-money.
C) finish out-of-the-money.
D) either finish at-the-money or in-the-money.
E) either finish at-the-money or out-of-the-money.
G) A) and B)
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A) Warrants are generally issued as an attachment to publicly-issued bonds.
B) Warrants are excluded from trading on an organized exchange.
C) Warrants are structured as long-term put options.
D) Warrants are issued by individual investors.
E) Warrants are generally added as an incentive to a private debt issue.
G) A) and D)
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A) -$83
B) -$1.08
C) $0
D) $108
E) $864
G) B) and D)
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E
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A) equal to the conversion value minus the straight bond value.
B) equal to the face value of the bond multiplied by (1 + Conversion price) .
C) limited to the maximum straight bond value.
D) limited by the face value of the bond.
E) unlimited.
G) A) and B)
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A) $0.15
B) $0.30
C) $1.50
D) $15.00
E) $30.00
G) All of the above
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