FIN 351 WEEK 5 QUIZ

Question 1.	Question :	(TCO 5) Which of the following statements describes the relationship between the market value, pure bond value, and associated stock price related to a convertible bond?

 	

Question 2.	Question :	(TCO 5) Which is the conversion ratio of a $1,000 bond convertible at $27 per share? The coupon rate is 10% and the market rate 12%. This company's common stock is currently trading at $23 per share.

 	

Question 3.	Question :	(TCO 5) When the strike price is _____ the market price, a call is said to be “in-the-money.”

 	



Question 4.	Question :	(TCO 5) All of the following items listed below are advantages of buying call options instead of stock EXCEPT _____.

 	



Question 5.	Question :	(TCO 5) The _____ is the issuer of all options listed on the exchanges, and is responsible for the liquidity and ease of operation of the options market.

 	



Question 6.	Question :	(TCO 5) Hedging through the use of futures contracts _____.

 	



Question 7.	Question :	(TCO 5) The primary difference between options and futures is that _____.

 	


Question 8.	Question :	(TCO 5) Stock index futures and options allow an investor to _____.

 	



Question 9.	Question :	(TCO 5) The margin requirement will be lower than the standard requirement on a stock index futures contract when _____.

 	



Question 10.	Question :	(TCO 5) An investor earns a profit on a put option when _____.