Which one of the following statements is correct concerning the Black-Scholes option pricing model?

Suppose you purchase seven call contracts on Macron Technology stock. The strike price is $75, and the premium is $4.40. If, at expiration, the stock is selling for $83 per share, What is your net profit? (Do not include the $ sign)

Correlation is the:

Which one of the following is the lower price bound for the intrinsic value of an American put option on a stock?

An increase in which two of the following will have a negative effect on the value of a put option?risk-free interest ratetime to option maturityunderlying stock priceoption strike price

You own 200 shares of Delta stock, which is currently worth $33 a share. You just paid an option premium of $.55 to buy two put contracts on this stock with a strike price of $30. What is the maximum loss per share you are avoiding by purchasing the option contract?

Which one of the following correlation coefficients can provide the greatest diversification benefit?

Use the following information to calculate the  standard deviation of a portfolio that is 70 percent invested in 3 Doors, Inc., and 30 percent invested in Down Co.: (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Do not include the % sign.     3 Doors, Inc.   Down Co. Expected return, E(R) 12 %   12 % Standard deviation, σ 42     44   Correlation     .27      

You purchased 1 SPX call option with a strike of 1500. You wrote one SPX call option with the same maturity date and a strike of 1450. At maturity, what is your payoff if the S&P 500 is at 1475?

The following are the functions of the membrane proteins, except: