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9) A put option on ABC stock currently sells for $4.00. The exercise price and the stock price is $60. The put option has a delta of 0.5. If within a short period of time the stock price increases to $60.10, what would be the change in the price of the put option? A) Increases by $0.05 B) Decreases by $0.05 C) Increases by $0.10 D) Decreases by $0.10

9) A put option on ABC stock currently sells for $4.00. The exercise price and the stock price is $60. The put option has a delta of 0.5. If within a short period of time the stock price increases to $60.10, what would be the change in the price of the put option? A) Increases by $0.05 B) Decreases by $0.05 C) Increases by $0.10 D) Decreases by $0.10

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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7) The historical nominal returns for stock A were -8 percent, +10 percent, and +22 percent. The nominal returns for the market portfolio were +6 percent, +18 percent, and 24 percent during this same time. Calculate the beta for stock A. A) 1.64 B) 0.61 C) 1.00 D) 0.50 8) Which of the following is a statement of semi-strong form efficiency? I) Stock prices will adjust immediately to public information. II) Stock prices reflect all information. III) Stock prices will adjust to newly published information after a long time delay. A) I only B) II only C) II and III only D) III only 9) A put option on ABC stock currently sells for $4.00. The exercise price and the stock price is $60. The put option has a delta of 0.5. If within a short period of time the stock price increases to $60.10, what would be the change in the price of the put option? A) Increases by $0.05 B) Decreases by $0.05 C) Increases by $0.10 D) Decreases by $0.10
Transcribed Image Text:7) The historical nominal returns for stock A were -8 percent, +10 percent, and +22 percent. The nominal returns for the market portfolio were +6 percent, +18 percent, and 24 percent during this same time. Calculate the beta for stock A. A) 1.64 B) 0.61 C) 1.00 D) 0.50 8) Which of the following is a statement of semi-strong form efficiency? I) Stock prices will adjust immediately to public information. II) Stock prices reflect all information. III) Stock prices will adjust to newly published information after a long time delay. A) I only B) II only C) II and III only D) III only 9) A put option on ABC stock currently sells for $4.00. The exercise price and the stock price is $60. The put option has a delta of 0.5. If within a short period of time the stock price increases to $60.10, what would be the change in the price of the put option? A) Increases by $0.05 B) Decreases by $0.05 C) Increases by $0.10 D) Decreases by $0.10
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