Fin 534 final exam - Study guides, Class notes & Summaries

CHAPTER 8—FINANCIAL OPTIONS AND APPLICATIONS IN CORPORATE FINANCE TRUE/FALSE 1. An option is a contract that gives its holder the right to buy or sell an asset at a predetermined price within a specified period of time. ANS: T PTS: 1 DIF: Difficulty: Easy OBJ: LO: 8-1 NAT: BUSPROG: Reflective Thinking STA: DISC: Derivatives LOC: TBA TOP: Options KEY: Bloom’s: Knowledge

Question An option is a contract that gives its holder the right to buy or sell an asset at a predetermined price within a specified period of time, ANS: T PTS: 1 DIF: Difficulty: Easy OBJ: LO: 8-1 NAT: BUSPROG: Reflective Thinking STA: DISC: Derivatives LOC: TBA TOP: Options KEY: Bloom’s: Knowledge Question The Strike price is the price that must be paid for a share of common stock when it is bought by exercising a warrant,

FIN534 Final Exam

Strayer University - FIN 534 WEEK 11 FINAL EXAM PART 2. Complete Solution. A+ Graded.Question 1 2 out of 2 points Which of the following is NOT normally regarded as being a barrier to hostile takeovers? Answer Selected Answer: Abnormally high executive compensation. Correct Answer: Abnormally high executive compensation.  Question 2 2 out of 2 points Which of the following is NOT normally regarded as being a good reason to establish an ESOP? Answer Selected Answer: To make it easier to grant ...

FIN 534 Final Exam Solution Questions And Answers

Strayer University - FIN 534 WEEK 11 FINAL EXAM PART 1. Complete Solution. A+ Graded.Question 1 2 out of 2 points Which of the following statements is CO RRECT? Selected Answer: If the underlying stock does not pay a dividend, it does not make good economic sense to exercise a call option prior to its expiration date, even if this would yield an immediate profit. Correct Answer: If the underlying stock does not pay a dividend, it does not make good economic sense to exercise a call option prior ...

FIN 534- WEEK 11 FINAL EXAM PART 1 FIN 534- WEEK 11 FINAL EXAM PART 1 FIN 534- WEEK 11 FINAL EXAM PART 1 FIN 534- WEEK 11 FINAL EXAM PART 1

Question Which of the following Statements is CORRECT? Call options generally Sell at a price less than their exercise value, If a Stock becomes riskier (more volatile), call options on the stock are likely to decline in value, Call options generally Sell at prices above their exercise value, but for an in-the-money Option, the greater the exercise value in relation to the Strike price, the lower the premium On the option is likely to be, Because Of the put-call parity relationship, un...